The isopenicillin N synthetase (IPS) gene from Penicillium chrysogenum was isolated from a recombinant bacteriophage lambda library using the Cephalosporium acremonium IPS (cIPS) gene as a heterologous hybridization probe. The protein coding region of the P. chrysogenum IPS (pIPS) gene was about 74% homologous to the cIPS gene, and the predicted amino acid sequences of the encoded proteins were about 73% homologous. Escherichia coli cells with the pIPS gene contained IPS activity whereas untransformed cells were completely devoid of this enzymatic activity. The transformed cells were also shown to contain an abundant protein accounting for about 10% of total cell protein which reacted strongly with anti-cIPS antiserum.