The lipase inhibitor lipstatin is biosynthesized in Streptomyces toxytricini via condensation of a C(14) precursor and a C(8) precursor, which are both obtained from fatty acid catabolism. To study the mechanism of this reaction in more detail, S. toxytricini was grown in medium containing a mixture of U-(13)C,U-(2)H-lipids and unlabeled sunflower oil or in a medium containing 70% D(2)O. Lipstatin was isolated and analyzed by (1)H,(2)H, and (13)C NMR spectroscopy. Hydrogen atoms at C-2, C-3, and C-4 of lipstatin were found to be derived from solvent protons. The formation of the lipstatin precursor 3-hydroxy-Delta(5,8)-tetradecadienoyl-CoA by beta oxidation of linoleic acid explains the incorporation of solvent hydrogen into the 4 position of lipstatin. The hydrogen in position 3 of lipstatin is most probably introduced from solvent by proton/deuterium exchange of a redox cofactor involved in the reduction of the keto group in the branched chain beta keto acid arising by a decarboxylative condensation. The incorporation of solvent hydrogen at position 2 can be explained by epimerization of a chiral intermediate at C-2 and C-3. Epimerization may involve a dehydration-rehydration mechanism.