Cytochrome bd is a respiratory quinol oxidase in Escherichia coli. Besides the structural genes (cydA and cydB) encoding the oxidase complex, the cydD and cydC genes, encoding an ABC-type transporter, are required for assembly of this oxidase. Recently, cysteine has been identified as a substrate (allocrite) that is transported from the cytoplasm by CydDC, but the mechanism of cysteine export to the periplasm and its role there remain unknown. To initiate an understanding of structure–function relationships in CydDC, its membrane topography was analysed by generating protein fusions between random and selected residues in the two polypeptides with both alkaline phosphatase and β-galactosidase. CydD and CydC are experimentally shown each to have six transmembrane segments, two major cytoplasmic loops and three minor periplasmic loops; both termini of each protein face the cytoplasm. The cydD1 allele is shown to have two point mutations (G319D, G429E) within the ATP-binding domain of CydD; either mutation alone is sufficient to cause loss or severe reduction of cytochrome bd assembly. A comparative sequence analysis prompted the targeting of residues in CydD for site-directed mutational analysis, which identified (i) the ‘start’ methionine residue, (ii) essential residues in the ATP-binding site (Walker sequence A) and (iii) a duplicated positively charged heptameric motif, R-G/T-L/M-X-T/V-L-R, in CydD cytoplasmic loop II. The replacement of arginines in these motifs with glycines resulted in Cyd− phenotypes; however, activity could be restored at these positions by replacing the glycine with lysine or histidine and hence returning the positive charge. The conservation of these charges in CydD-like proteins indicates functional importance. Evolutionary aspects of bacterial cyd genes are discussed.