Polyene macrolides are potent antifungal agents that are also active against parasites, enveloped viruses and prion diseases. They are medically important as antifungal antibiotics but their therapeutic use is limited by serious side effects. In recent years there has been considerable progress in genetic analysis and manipulation of the streptomycetes that produce nystatin, amphotericin B, candicidin, pimaricin and rimocidin/CE-108-related polyenes. This has led to engineered biosynthesis of several new polyenes that are not easily obtained as semi-synthetic derivatives. This review summarises recent advances made since the subject was last reviewed in 2003. Polyene biosynthesis generally involves assembly and cyclisation of a polyketide chain, followed by oxidative modifications and glycosylation of the macrolactone ring. New derivatives have been obtained by engineering both early and late stages of polyene biosynthetic pathways. These compounds have allowed more detailed investigations of structure-activity relationships and some are likely to show improvements in therapeutic index. The biosynthetic approach is already yielding sufficient material for testing the toxicity and activity of new compounds, thus opening possibilities for discovery of leads for development of effective and safe antifungal and antiparasitic agents.