Puromycin, produced by Streptomyces alboniger, is a member of the large group of aminonucleoside antibiotics. The genes pac and dmpM, encoding a puromycin N-acetyl transferase and an O-demethyl puromycin O-methyltransferase, respectively, are tightly linked in the DNA of S. alboniger. The entire set of genes encoding the puromycin biosynthesis pathway was cloned by screening a gene library from S. alboniger, raised in the low copy number cosmid pKC505, with a DNA fragment containing pac and dmpM. Puromycin was identified by biochemical and physicochemical methods, including 1H NMR, in the producing transformants. This pathway was located in a single DNA fragment of 15 kb which included the resistance, structural and regulatory genes and was expressed when introduced into two heterologous hosts Streptomyces lividans and Streptomyces griseofuscus. In addition to pac and dmpM, two other genes have been identified in the pur cluster: pacHY, which determines an N-acetylpuromycin hydrolase and prg1, whose deduced amino acid sequence is significantly similar to that of degT, a Bacillus stearothermophilus pleiotropic regulatory gene.