<jats:p>The genes encoding the polyketide synthase (PKS) portion of the niddamycin biosynthetic pathway were isolated from a library of Streptomyces caelestis NRRL-2821 chromosomal DNA. Analysis of 40 kb of DNA revealed the presence of five large open reading frames (ORFs) encoding the seven modular sets of enzymatic activities required for the synthesis of a 16-membered lactone ring. The enzymatic motifs identified within each module were consistent with those predicted from the structure of niddamycin. Disruption of the second ORF of the PKS coding region eliminated niddamycin production, demonstrating that the cloned genes are involved in the biosynthesis of this compound.