Group 1 capsules of 'Escherichia coli' and 'Klebsiella pneumoniae' are important virulence determinants. However, despite their importance, we still do not have a complete understanding of their biosynthetic mechanisms, transcriptional organization or regulation. The K30 capsule gene cluster ('cps') from 'E. coli' isolate E69 has been sequenced and serves as the prototype. Genes involved in high-level polymerization and surface assembly of the polymer are located promoter proximal in the cluster, while those responsible for repeat unit synthesis and polymerization are promoter distal in the cluster. In this work, the 'cps' clusters from ' E. coli' and 'K. pneumoniae' isolates representing different serotypes were shown to be highly conserved in gene order and in nucleotide sequence of the serotype-independent genes. Many 'cps' clusters are flanked upstream by partial IS elements that are implicated in genetic exchange and could explain this high degree of conservation. The first open reading frame of the clusters, 'orfX', is also highly conserved. Although OrfX has no homologues outside of the 'cps' clusters, mutagenesis showed that it functions in capsule biosynthesis. OrfX was localized to the outer membrane where it is proposed to function in surface assembly. 'cps' transcription was shown to be driven by a region that includes an 'ops' (o_peron p_olarity s_uppressor) element, which functions in conjunction with the antitermination protein RfaH. A stem-loop structure, whose termination activity was verified 'in vivo', separates the serotype-independent genes from the serotype-specific genes in the K30 operon. As no promoter exists downstream of the terminator, it must function as an attenuator. A 'rfaH' mutation resulted in decreased 'cps' transcription. Chromosomal fusion experiments showed that 'cps' transcription is not directly regulated by the Rcs (r_egulator of c_apsule s_ynthesis) two-component regulatory system as previously believed. Overexpression of the transcriptional activator RcsB results in a mucoid phenotype, but neither overexpression nor inactivation of RcsB affected 'cps' transcription. High-level RcsB expression increased transcription of 'galF', which is involved in precursor biosynthesis. GalF overexpression results in increased K30 production without affecting 'cps' transcription. These results suggest that levels of group 1 capsule production may be controlled in a novel manner via activation of 'galF'.