A cloned cytolytic determinant from the genome of Bacillus cereus GP-4 has been characterized at the molecular Ievel. Nucleotide sequence determination revealed the presence of two open reading frames. 8oth open reading frames were found by deletion and complementation analysis to be necessary for expression of the hemolytic phenotype by Bacillus subtilis and Escherichia coli hosts. The 5' open reading frame was found to be nearly identical to a recently reported phospholipase C gene derived from a mutant B. cereus strain which overexpresses the respective protein, and it conferred a lecithinase-positive phenotype to the B. subtilis host. The 3' open reading frame encoded a sphingomyelinase. The two tandemly encoded activities, phospholipase C and sphingomyelinase, constitute a biologically functional cytolytic determinant of B. cereus termed cereolysin AB.