In Streptomyces venezuelae, four polyketide synthase (PKS) polypeptides encoded by pikAI-pikAIV are used to generate 10 and 12-membered macrocyclic structures, narbonolide and 10-deoxymethynolide. Sequence analysis suggests these genes are translationally coupled with downstream genes, pikAV (encoding a type II thioesterase), desVIII-desVI (encoding enzymes responsible for production of the final glycosylated products pikromycin, narbomycin, methymycin and neomethymycin) and desR (a resistance gene). Type II thioesterases have been suggested to have an editing function in polyketide biosynthesis and deletion of the corresponding genes often leads to decreased levels of polyketide production. Surprisingly an in-frame deletion of 687 bp of the 843 bp pikAV ORF led to a strain SC1022 that produced normal yields of polyketide products, but only in the aglycone form. Plasmid-based expression of the desVIII-VI and desR in the SC1022 strain completely restored production of glycosylated products, despite the absence of a functional pikAV gene product. Under these conditions the PikAV TEII therefore does not play an important role in polyketide biosynthesis, and its function remains an enigma. These observations also demonstrate that the region of pikAV DNA deleted in strain SC1022 contains a transcription unit essential for expression of the des genes. A sequence alignment of PikAV with members of the highly conserved type II thioesterases revealed a short divergent region at the carboxy terminus, suggesting a region of pikAV that might contain such a transcription unit. DNA containing this region of pikAV was shown to be able to increase plasmid-based expression of both crotonyl CoA reductase gene (ccr) and the erythromycin resistance gene (ermE) in S. venezuelae. © 2001 Elsevier Science B.V.