Aeromonas hydrophila is a gram-negative opportunistic pathogen in fish and humans. Many bacterial pathogens of animals and plants have been shown to inject anti-host virulence determinants into the hosts via a type III secretion system (TTSS). Degenerate primers based on lcrD family genes that are present in every known TTSS allowed us to locate the TTSS gene cluster in A. hydrophila AH-1. A series of genome walking steps helped in the identification of 25 open reading frames that encode proteins homologous to those in TTSSs in other bacteria. PCR-based analysis showed the presence of lcrD homologs (ascV) in all of the 33 strains of A. hydrophila isolated from various sources. Insertional inactivation of two of the TTSS genes (aopB and aopD) led to decreased cytotoxicity in carp epithelial cells, increased phagocytosis, and reduced virulence in blue gourami. These results show that a TTSS is required for A. hydrophila pathogenesis. This is the first report of sequencing and characterization of TTSS gene clusters from A. hydrophila. The TTSS identified here may help in developing suitable vaccines as well as in further understanding of the pathogenesis of A. hydrophila.