A new polyketide gene cluster, aur1, was identified in Streptomyces aureofaciens CCM3239 by using genes for the spore-pigment polyketide synthase of the Streptomyces coelicolor whiE operon as a probe. Sequence analysis of three overlapping DNA fragments (encompassing 15,100 bp) revealed 15 open reading frames, the majority of which showed high similarity to the previously characterized type II polyketide synthase genes. The highest similarity was to three Streptomyces polyketide gene clusters involved in biosynthesis of angucycline antibiotics, jadomycin, urdamycin and landomycin. The proposed S. aureofaciens ketosynthase (Aur1D) was phylogenetically more related to all known ketosynthases for polyketide antibiotics in Streptomyces than to spore-pigment ketosynthases. Interestingly, the aur1 gene cluster contained a gene encoding a proposed malonyl-CoA:ACP transacylase that has not been identified in any of the previously characterized type II polyketide synthase cluster. Transcriptional analysis of aur1 revealed a single promoter upstream the first open reading frame (the aur1A gene) that was active in all stages of differentiation with increased activity at the time of aerial mycelium formation. The aur1 gene cluster was disrupted by a homologous recombination, replacing the three genes (aur1B,C,D) including ketosynthase, with antibiotic resistance marker gene in S. aureofaciens chromosome. Disruption did not affect growth and differentiation; disrupted strain produced spores with wild-type gray-pink pigmentation. The biochromatographic analysis of the culture extracts from S. aureofaciens wild-type and aur1-disrupted strains revealed an antibacterial compound that was missing in the mutant. The results indicated a role of the S. aureofaciens aur1 gene cluster in biosynthesis of a polyketide secondary metabolite (which we named auricin), and not in the spore pigment biosynthesis.