Azotobacter vinelandii is a soil gamma-proteobacteria that fixes nitrogen and forms desiccation-resistant cysts. The exopolysaccharide alginate is an integral part of the layers surrounding the cysts. Here, we reported the cloning of A. vinelandii algC, encoding the enzyme catalyzing the second step of alginate pathway. We showed that AlgC is involved not only in alginate production, but also in lipopolysaccharide (LPS) synthesis and that it seems to have both phosphomannomutase and phosphoglucomutase activities. The transcriptional analysis of the A. vinelandii algC gene showed that it contained two start sites, one of which was dependent on the alternative sigma factor AlgU/AlgT. This finding explains why alginate biosynthesis is dependent on AlgU activity, since all other alginate biosynthetic genes have been characterized previously and algC is the only alginate structural gene that is directly transcribed by this sigma factor.