ABSTRACT: BACKGROUND: Most biological nitrogen fixation is catalyzed by the molybdenum nitrogenase. This enzyme is a complex which contains the MoFe protein encoded by nifDK and the Fe protein encoded by nifH. In addition to nifHDK, nifHDK-like genes were found in some Archaea and Firmicutes, but their function is unclear. RESULTS: We sequenced the genome of Paenibacillus sabinae T27. A total of 4,793 open reading frames were predicted from its 5.27 Mb genome. The genome of P. sabinae T27 contains fifteen nitrogen fixation (nif) genes, including three nifH, one nifD, one nifK, four nifB, two nifE, two nifN, one nifX and one nifV. Of the 15 nif genes, eight nif genes (nifB, nifH, nifD, nifK, nifE, nifN, nifX and nifV) and two non-nif genes (orf1 and hesA) form a complete nif gene cluster. In addition to the nif genes, there are nitrogenase-like genes, including two nifH-like genes and five pairs of nifDK-like genes. IS elements on the flanking regions of nif and nif-like genes imply that these genes might have been obtained by horizontal gene transfer. Phylogenies of the concatenated 8 nif gene (nifB, nifH, nifD, nifK, nifE, nifN, nifX and nifV) products suggest that P. sabinae T27 is closely related to Frankia. RT-PCR analysis showed that the complete nif gene cluster is organized as an operon. We demonstrated that the complete nif gene cluster under the control of ?70-dependent promoter enabled Escherichia coli JM109 to fix nitrogen. Also, here for the first time we demonstrated that unlike nif genes, the transcriptions of nifHDK-like genes were not regulated by ammonium and oxygen, and nifH-like or nifD-like gene could not restore the nitrogenase activity of Klebsiella pneumonia nifH- and nifD- mutant strains, respectively, suggesting that nifHDK-like genes were not involved in nitrogen fixation. CONCLUSIONS: Our data and analysis reveal the contents and distribution of nif and nif-like genes and contribute to the study of evolutionary history of nitrogen fixation in Paenibacillus. For the first time we demonstrated that the transcriptions of nifHDK-like genes were not regulated by ammonium and oxygen and nifHDK-like genes were not involved in nitrogen fixation.