A defective prophage vector, φ105MU331, for high-level protein overproduction in Bacillus subtilis, was derived by random insertion of a lacZ reporter gene. The site of insertion not only provided efficient inducible transcription of heterologous genes, but also prevented lysis of the host cell. The region of the insertion in φ105MU331 lies close to the right cohesive end of φ105. DNA sequence analysis revealed that this region of φ105 somewhat resembles the lysis cassette of various phages, including λ. The site of insertion lies in a possible holin gene, which could explain the block in host cell lysis. Dual promoters apparently responsible for the strong inducible transcription lie in an untranslated region just upstream from the putative holin gene. This region is probably equivalent to the site of the major late promoter and antiterminator of the lambdoid phages. The sequence features could, thus, account for the useful properties of the φ105MU331 vector system.