To gain insight into the function and regulation of malonyl-CoA decarboxylase (MCD) we have cloned rat MCD cDNA from a differentiated insulin-secreting pancreatic beta-cell-line cDNA library. The full-length cDNA sequence shows 69% identity with the cDNA cloned previously from the goose uropygial gland, and predicts a 492 amino acid protein of 54.7 kDa. The open reading frame contains an N-terminal mitochondrial targeting sequence and the C-terminal part of the enzyme ends with a peroxisomal (Ser-Lys-Leu) targeting motif. Since the sequence does not reveal hydrophobic domains, MCD is most likely expressed in the mitochondrial matrix and inside the peroxisomes. A second methionine residue, located 3' of the mitochondrial presequence, might be the first amino acid of a putative cytosolic MCD, since the nucleotide sequence around it fits fairly well with a consensus Kozak site for translation initiation. However, primer extension detects the presence of only one transcript initiating upstream of the first ATG, indicating that the major, if not exclusive, transcript expressed in the pancreatic beta-cell encodes MCD with its mitochondrial presequence. The sequence also shows multiple possible sites of phosphorylation by casein kinase II and protein kinase C. mRNA tissue-distribution analysis indicates a transcript of 2.2 kb, and that the MCD gene is expressed over a wide range of rat tissues. The distribution of the enzyme shows a broad range of activities from very low in the brain to elevated in the liver and heart. The results provide the foundations for further studies of the role of MCD in lipid metabolism and metabolic signalling in various tissues.