Transduction of the lac + property to lac − recipient bacteria by phage P1 was used to study the properties of the transducing particles and the structure of the lac genetic regions in E. coli and S. dysenteriae. The lac + property requires the function of two loci, z (β-galactosidase gene) and y (permease gene). In transduction with E. coli donors and S. dysenteriae recipients or vice versa, many transductants are lac + heterogenotes, in which a z + gene from S. dysenteriae and a y + gene from E. coli are present as endogenote and exogenote, in either combination. The exogenote is often a defective prophage Pl dl, and defective phage particles Pl dl are present at high concentrations in lysates from these heterogenotes. Other transductants possess, integrated in their chromosome, a hybrid lac region derived partly from E. coli, partly from S. dysenteriae by recombination. These hybrids have various levels of β-galactosidase, ranging from the high values of E. coli to the low values found in the S. dysenteriae parent strain. It was found that most mutations in the z locus of E. coli, in addition to suppressing production of β-galactosidase, also reduce the level of permease formed under the control of the adjacent y locus.