A ketolase gene has been isolated from Rhodococcus erythropolis AN12 strain encoding a carotenoid modification enzyme of the carotenoid biosynthetic pathway. The gene and gene product are the first isolated from a Rhodococcus strain. Six conserved amino acid motifs have been identified as the characteristic of this type of ketolase enzymes. The gene and gene product of the present invention may be used in a variety of ways for the production of keto-carotenoid compounds in a variety of organisms.