The rhizobacterium Stenotrophomonas rhizophila accumulates the compatible solutes glucosylglycerol (GG) and trehalose under salt stress conditions. The complete gene for the GG synthesis enzyme was cloned and sequenced. This enzyme from S. rhizophila represented a novel fusion protein composed of a putative C-terminal GG-phosphate synthase domain and an N-terminal putative GG-phosphate phosphatase domain, which was named GgpPS. A similar gene was cloned from Pseudomonas sp. strain OA146. The ggpPS gene was induced after a salt shock in S. rhizophila cells. After the salt-loaded cells reached stationary phase, the ggpPS mRNA content returned to the low level characteristic of the control cells, and GG was released into the medium. The complete ggpPS gene and a truncated version devoid of the phosphatase part were obtained as recombinant proteins. Enzyme activity tests revealed the expected abilities of the full-length protein to synthesize GG and the truncated GgpPS to synthesize GG-phosphate. However, dephosphorylation of GG-phosphate was detected only with the complete GgpPS protein. These enzyme activities were confirmed by complementation experiments using defined GG-defective mutants of the cyanobacterium Synechocystis sp. strain PCC 6803. Genes coding for proteins very similar to the newly identified fusion protein GgpPS for GG synthesis in S. rhizophila were found in genome sequences of related bacteria, where these genes are often linked to a gene coding for a transporter of the Mfs superfamily.