Mycobacterium sp. TY-6 and Pseudonocardia sp. TY-7 were isolated from soil samples as propane-utilizing bacteria and were found to be able to utilize various gaseous and liquid n-alkanes as carbon and energy sources. One gene cluster, M-prmABCD, and two gene clusters, P-prm1ABCD and P-prm2ABCD, were cloned from the genomes of Mycobacterium sp. TY-6 and Pseudonocardia sp. TY-7, respectively. These gene clusters are homologous to the gene cluster encoding the multicomponent propane monooxygenase (prmABCD) of Gordonia sp. TY-5. The expression of prm gene clusters in Mycobacterium sp. TY-6 and Pseudonocardia sp. TY-7 was shown to be induced by gaseous n-alkanes (C-2-C-4) except methane, suggesting that the products of these genes are involved in gaseous n-alkane oxidation. Homologous genes for an alkane hydroxylase system (alk system) involved in liquid n-alkane oxidation were also cloned from the genomic DNA of Mycobacterium sp. TY-6. The alk gene cluster was transcribed in response to liquid n-alkanes (C-11-C-15). These results indicate that Mycobacterium sp. TY-6 has two distinct gene clusters for multicomponent monooxygenases involved in alkane oxidation. Whole-cell reactions revealed that propane is oxidized to I-propanol through terminal oxidation in Mycobacterium sp. TY-6 and that propane is oxidized to 1-propanol and 2-propanol through both terminal and subterminal oxidations in Pseudonocardia sp. TY-7. This study reveals the diversity of propane metabolism present in microorganisms.