Growth experiments showed that adenine and hypoxanthine can be used as nitrogen sources by several strains of K. pneumoniae under aerobic conditions. The assimilation of all nitrogens from these purines indicates that the catabolic pathway is complete and proceeds past allantoin. Here we identify the genetic system responsible for the oxidation of hypoxanthine to allantoin in K. pneumoniae. The hpx cluster consists of seven genes, for which an organization in four transcriptional units, hpxDE, hpxR, hpxO and hpxPQT, is proposed. The proteins involved in the oxidation of hypoxanthine (HpxDE) or uric acid (HpxO) did not display any similarity to other reported enzymes known to catalyze these reactions, but instead are similar to oxygenases acting on aromatic compounds. Expression of the hpx system is activated by nitrogen limitation and by the presence of specific substrates, with hpxDE and hpxPQT controlled by both signals. Nitrogen control of hpxPQT transcription, which depends on 54, is mediated by the Ntr system. In contrast, neither NtrC nor NAC is involved in the nitrogen control of hpxDE, which is dependent on 70 for transcription. Activation of these operons by the specific substrates is also mediated by different effectors and regulatory proteins. Induction of hpxPQT requires uric acid formation, whereas expression of hpxDE is induced by the presence of hypoxanthine through the regulatory protein HpxR. This LysR-type regulator binds to a TCTGC-N4-GCAAA site in the intergenic hpxD-hpxR region. When bound to this site for hpxDE activation, HpxR negatively controls its own transcription.