Nitrogenase is a functionally constant protein catalyzing N2 reduction, which is found in many phylogenetic lineages of Archaea and Bacteria. A phylogenetic analysis of nif genes may provide insights into the evolution of the bacterial genomes. Moreover, it may be used to study diazotrophic communities, when classical isolation techniques may fail to detect all contributing populations. Among six species of the genus Azoarcus, diazotrophic Proteobacteria of the beta subclass, the deduced amino acid sequences of nifH genes of two species were unusually divergent from each other. Nitrogenases of the "authentic" Azoarcus branch formed a monophyletic unit with those of gamma Proteobacteria, thus being in accordance with 16S ribosomal DNA phylogeny. The nitrogenase proteins of the two aberrant strains clustered within the alpha proteobacterial clade with rhizobial nitrogenases. This relationship was supported by bootstrap values of 87 to 98% obtained by various distance and maximum parsimony methods. Phylogenetic distances of NifH proteins indicate a possible lateral gene transfer of nif genes to Azoarcus from a common donor of the alpha subclass at the time of species diversification or several more recent, independent transfers. Application of the phylogenetic analysis to DNA isolated from environmental samples demonstrated novel habitats for Azoarcus: in guts of termites and rice grown in Japan, nifH genes belonging to the authentic Azoarcus branch were detected. This is the first evidence suggesting the occurrence of Azoarcus spp. in a plant other than its originally described host, Kallar grass. Moreover, evidence for expression of nif genes inside grass roots was obtained by in situ hybridization studies with antisense nifH probes.