The biosynthesis of clavulanic acid and related clavam metabolites is only now being elucidated. Understanding of this pathway has resulted from a combination of both biochemical studies of purified biosynthetic enzymes, and molecular genetic studies of the genes encoding these enzymes. Clavulanic acid biosynthesis has been most thoroughly investigated in Streptomyces clavuligerus where the biosynthetic gene cluster resides immediately adjacent to the cluster of cephamycin biosynthetic genes. A minimum of eight structural genes have been implicated in clavulanic acid biosynthesis, although more are probably involved. While details of the early and late steps of the pathway remain unclear, synthesis proceeds from arginine and pyruvate, as the most likely primary metabolic precursors, through the monocyclic beta-lactam intermediate, proclavaminic acid, to the bicyclic intermediate, clavaminic acid, which is a branch point leading either to clavulanic acid or the other clavams. Conversion of clavaminic acid to clavulanic acid requires side chain modification as well as inversion of ring stereochemistry. This stereochemical change occurs coincident with acquisition of the beta-lactamase inhibitory activity which gives clavulanic acid its therapeutic and commercial importance. In contrast, the other clavam metabolites all arise from clavaminic acid with retention of configuration and lack beta-lactamase inhibitory activity.