Certain bacterial species possess the capability of differentiation through several morphogenetic changes which enable them to adapt to certain internal and external stimuli(Losick and Shapiro 1984). Upon induction, cells of A. vinelandii undergo a morphological process which leads to the production of one cyst per cell (Sadoff, 1975). The cysts are considerably resistant to desiccation, which confers a survival advantages upon the organism(Socolofsky and Wyss 1962). Like other prokaryotic differentiations encystment provides a relatively simple model of cellular differentiation. Like in other differentiating bacteria, vegetative growth can be separated from differentiation. Furthermore, the differentiation cycle can be synchronized by specific inducer. There have been a great deal of morphological and physiological studies on this process. However, the mechanisms used to regulate cell differentiation can be clearly defined by careful genetic analysis of the process. Unfortunately, A. vinelandii has proven to be difficult for genetic analysis (Sadoff 1975). For example, it has been shown that a variety of metabolic mutants of Azotobacter speicies are difficult to isolate after mutagenesis with chemical mutagens or UV irradiation. Nevertheless recent advances in molecular genetics in Azotobacter species, especially in the nitrogen fixation research area, appear to be able to overcome this difficulty (Robinson et al. 1986; Kennedy et al. 1986).