Although Rhizobium sp. NGR234 and Rhizobium fredii USDA257 share many traits, dysfunctional nodSU genes in the latter prohibit nodulation of Leucaena species. Accordingly, we used R. fredii transconjugants harboring the nodS and nodU genes of NGR234 to study their role in the structural modification of the lipo-oligosaccharide Nod factors. Differences between the Nod factors mainly concern the length of the oligomer (three to five glucosamine residues in USDA257 and five residues only in NGR234) and the presence of additional substituents in NGR234 (N-linked methyl, one or two carbamoyl groups on the non-reducing moiety, acetyl or sulfate groups on the fucose). R. fredii(nodS) transconjugants produce chitopentamer Nod factors with a N-linked methyl group on the glucosaminyl terminus. Introduction of nodU into USDA257 results in the formation of 6-O-carbamoylated factors. Co-transfer of nodSU directs N-methylation, mono-6-O-carbamoylation, and production of pentameric Nod factors. Mutation of nodU in NGR234 suppresses the formation of bis-carbamoylated species. Insertional mutagenesis of nodSU drastically decreases Nod factor production, but with the exception of sulfated factors (which are partially N-methylated and mono-carbamoylated), they are identical to those of the wild-type strain. Thus, Nod factor levels, their degree of oligomerization, and N-methylation are linked to the activity encoded by nodS.