Elloramycin is an anthracycline-like antitumour drug produced by Streptomyces olivaceus Tü2353. Cosmid cos16F4 has been previously shown to direct the biosynthesis of the elloramycin aglycon 8-demethyltetracenomycin C (8-DMTC), but not elloramycin. Sequencing of the 24.2 kb insert in cos16F4 shows the presence of 17 genes involved in elloramycin biosynthesis (elm genes) together with another additional eight ORFs probably not involved in elloramycin biosynthesis. The 17 genes would code for the biosynthesis of the polyketide moiety, sugar transfer, methylation of the tetracyclic ring and the sugar moiety, and export. Four genes (rhaA, rhaB, rhaC and rhaD) encoding the enzymic activities required for the biosynthesis of the sugar l-rhamnose were also identified in the S. olivaceus chromosome. The involvement of this rhamnose gene cluster in elloramycin biosynthesis was demonstrated by insertional inactivation of the rhaB gene, generating a non-producer mutant that accumulates the 8-DMTC C aglycon. Coexpression of cos16F4 with pEM4RO (expressing the four rhamnose biosynthesis genes) in Streptomyces lividans led to the formation of elloramycin, demonstrating that both subclusters are required for elloramycin biosynthesis. These results demonstrate that, in contrast to most of the biosynthesis gene clusters from actinomycetes, genes involved in the biosynthesis of elloramycin are located in two chromosomal loci.