The mutD(dnaQ) gene in Escherichia coli codes for the epsilon subunit of the DNA polymerase pol III holoenzyme. Previous work has shown that this gene lies adjacent to the gene coding for RNase H (rnh). The two products are translated from diverging promoters. Here we report on the 1.6 kb (1 kb = 10(3) bases or base-pairs) sequence of the region coding for both genes, and the transcripts encoded by them. mutD codes for two transcripts, one of whose origins lies within the rnh structural gene. Both transcripts overlap and are complementary to a region of the rnh transcript. Thus, they can potentially form double-stranded helices with rnh. Of the two possible double-stranded structures, the shorter does not interfere with a likely rnh ribosome binding site, while the longer one does. We suggest that this unique organization may regulate rnh translation rates.