During the purification of delta-(L-alpha-aminoadipyl)-L-cysteinyl-D-valine synthetase (ACVS) from Streptomyces clavuligerus, a small protein (CLA) involved in clavulanic acid production co-purified with ACVS. A 24-mer mixed-DNA probe based on the N-terminal amino-acid sequence of CLA was used to isolate the corresponding gene (cla), located near one end of the known cluster of penicillin and cephamycin biosynthetic genes, 5.7 kb downstream from the pcbC gene which encodes isopenicillin-N synthase. The sequence of cla would encode a protein of 313 aa with a high degree of similarity to amidinohydrolase enzymes. The cla gene is located immediately upstream from the previously described clavaminate synthase 2-encoding gene (cs2), and cla homologs were only present in streptomycetes which produced clavam compounds. Replacement of cla with a disrupted copy of the gene blocked the production of clavulanic acid in starch asparagine medium (SA).