<jats:p>The lipopeptide antibiotic friulimicin, produced by <jats:italic>Actinoplanes friuliensis</jats:italic>, is an effective drug against Gram-positive bacteria, such as methicillin-resistant <jats:italic>Staphylococcus epidermidis</jats:italic> and <jats:italic>Staphylococcus aureus</jats:italic> strains. Friulimicin consists of a cyclic peptide core of ten amino acids and an acyl residue linked to an exocyclic amino acid. The acyl residue is essential for antibiotic activity, varies in length from C13 to C15, and carries a characteristic double bond at position Δ<jats:italic>cis</jats:italic>3. Sequencing of a DNA fragment adjacent to a previously described fragment encoding some of the friulimicin biosynthetic genes revealed several genes whose gene products resemble enzymes of lipid metabolism. One of these genes, <jats:italic>lipB</jats:italic>, encodes an acyl-CoA dehydrogenase homologue. To elucidate the function of the LipB protein, a <jats:italic>lipB</jats:italic> insertion mutant was generated and the friulimicin derivative (FR242) produced by the mutant was purified. FR242 had antibiotic activity lower than friulimicin in a bioassay. Gas chromatography showed that the acyl residue of wild-type friulimicin contains a double bond, whereas a saturated bond was present in FR242. These results were confirmed by the heterologous expression of <jats:italic>lipB</jats:italic> in <jats:italic>Streptomyces lividans</jats:italic> T7, which led to the production of unsaturated fatty acids not found in the <jats:italic>S. lividans</jats:italic> T7 parent strain. These results indicate that the acyl-CoA dehydrogenase LipB is involved in the introduction of the unusual Δ<jats:italic>cis</jats:italic>3 double bond into the acyl residue of friulimicin.