Incubation experiments using washed cells and toluene treated cells of Streptomyces garyphatus showed that O-acetyl-L-serine and hydroxyurea are intermediates in the biosynthesis of D-cycloserine. The formation of [14C]O-ureidoserine from O-acetyl-L-serine and hydroxyurea was demonstrated by incubating an enzyme solution with 14C-labelled substrates. Desalted cell-free extract catalyzed the conversion of O-ureido-D-serine to D-cycloserine in a reaction requiring ATP and Mg 2 +. The results suggested the following pathway for D-cycloserine biosynthesis: L-serine --* O-acetyl-L-serine ~ O-ureido-L-serine - hydroxyurea-~ O-ureido-D-serine --, D-cycloserine.