Microbial proline 4-hydroxylases, which hydroxylate free L-proline to trans-4-hydroxy-L-proline, were screened in order to establish an industrial system for biotransformation of L-proline to trans-4-hydroxy-L-proline. Enzyme activities were detected in eight strains, including strains of Dactylosporangium spp. and Amycolatopsis spp. The Dactylosporangium sp. strain RH1 enzyme was partially purified 3,300-fold and was estimated to be a monomer polypeptide with an apparent molecular mass of 31 kDa by sodium dodecyl sulfate-polyacrylamide gel electrophoresis. Degenerate primers based on the N-terminal amino acid sequence of the 31-kDa polypeptide were synthesized in order to amplify the corresponding 71-bp DNA fragment. A 5.5-kbp DNA fragment was isolated by using the 71-bp fragment labeled with digoxigenin as a probe for a genomic library of Dactylosporangium sp. strain RH1 constructed in Escherichia coli. One of the open reading frames found in the cloned DNA, which encoded a 272-amino-acid polypeptide (molecular mass, 29,715 daltons), was thought to be a proline 4-hydroxylase gene. The gene was expressed in E. coli as a fused protein with the N-terminal 34 amino acids of the -galactosidase -fragment. The E. coli recombinant exhibited proline 4-hydroxylase activity that was 13.6-fold higher than the activity in the original strain, Dactylosporangium sp. strain RH1. No homology was detected with other 2-oxoglutarate-dependent dioxygenases when databases were searched; however, the histidine motif conserved in 2-oxoglutarate-dependent dioxygenases was found in the gene.