Approximately 60% of Helicobacter pylori strains are cagA⁺ and this genotype is more frequently associated with duodenal ulcer disease. Although most wild‐type cagA⁺ strains are both cytotoxigenic and induce enhanced Interleukin‐8 (IL‐8) secretion in gastric epithelial cells, isogenic cagA⁻ mutants retain full activity in these assays; thus, cagA appears to be a marker of enhanced virulence. Delineation of the nucleotide sequence of a 4 kb region upstream of cagA allowed the identification of 966 bp (picA) and 2655 bp (picB) open reading frames encoding 36 kDa and 101 kDa polypeptides, respectively. picA and picB constitute an operon in opposite orientation to cagA. The deduced picB product showed significant homology (26% identity and 50% similarity) with the Bordetella pertussis toxin secretion protein (PtlC). Of 55 H. pylori clinical isolates, the picA and picB segment was conserved exclusively in cagA⁺ strains and present in all isolates from patients with duodenal ulceration, versus 59% of isolates from patients with gastritis alone (P=0.01). Using gene‐replacement techniques, we constructed picA and picB mutant H. pylori strains and demonstrated that the picB gene product is involved in the induction of IL‐8 expression in gastric epithelial cells. Further, Northern blot hybridization and RT‐PCR data showed that picA and picB are co‐transcribed and an insertional mutation in picA ablates picB expression. These studies indicate a role of picA and picB in the induction of an inflammatory response in gastric epithelial cells either directly or by enabling secretion of an unidentified product, and suggest a mechanism for the overrepresentation of strains possessing these genes in patients with peptic ulceration.