Daptomycin, a cyclic lipopeptide produced by Streptomyces roseosporus, is the active ingredient of Cubicin (daptomycin-for-injection), a first-in-class antibiotic approved for treatment of skin and skin-structure infections caused by Gram-positive pathogens and bacteremia and endocarditis caused by Staphylococcus aureus, including methicillin-resistant strains. Genetic engineering of the nonribosomal peptide synthetase (NRPS) in the daptomycin biosynthetic pathway was exploited for the biosynthesis of novel active antibiotics. lambda-Red-mediated recombination was used to exchange single or multiple modules in the DptBC subunit of the NRPS to modify the daptomycin cyclic peptide core. We combined module exchanges, NRPS subunit exchanges, inactivation of the tailoring enzyme glutamic acid 3-methyltransferase, and natural variations of the lipid tail to generate a library of novel lipopeptides, some of which were as active as daptomycin against Gram-positive bacteria. One compound was more potent against an Escherichia coli imp mutant that has increased outer membrane permeability. This study established a robust combinatorial biosynthesis platform to produce novel peptide antibiotics in sufficient quantities for antimicrobial screening and drug development.