A gene cluster responsible for the biosynthesis of validamycin, an aminocyclitol antibiotic widely used as a control agent for sheath blight disease of rice plants, was identified from Streptomyces hygroscopicus subsp. jinggangensis 5008 using heterologous probe acbC, a gene involved in the cyclization of D-sedoheptulose 7-phosphate to 2-epi-5-epi-valiolone of the acarbose biosynthetic gene cluster originated from Actinoplanes sp. strain SE50/110. Deletion of a 30-kb DNA fragment from this cluster in the chromosome resulted in loss of validamycin production, confirming a direct involvement of the gene cluster in the biosynthesis of this important plant protectant. A sequenced 6-kb fragment contained valA (an acbC homologue encoding a putative cyclase) as well as two additional complete open reading frames (valB and valC, encoding a putative adenyltransferase and a kinase, respectively), which are organized as an operon. The function of ValA was genetically demonstrated to be essential for validamycin production and biochemically shown to be responsible specifically for the cyclization of D-sedoheptulose 7-phosphate to 2-epi-5-epi-valiolone in vitro using the ValA protein heterologously overexpressed in E. coli. The information obtained should pave the way for further detailed analysis of the complete biosynthetic pathway, which would lead to a complete understanding of validamycin biosynthesis.