Alamethicin synthetase was extracted from the fungus Trichoderma viride at the end of its exponential growth phase. It is multienzyme complex with a molecular weight of approx. 480 000. The biosynthesis of alamethicin is initiated on the synthetase by acetylation of thiolester-bound aminoisobutyric acid, which remains enzyme bound. Acetyl-CoA serves as the acetate donor. Of the alamethicin constituents, glycine, alanine and valine are also acetylated when incubated alone. This acetylation is prevented by added aminoisobutyric acid, which indicates that the site on alamethicin synthetase catalyzing the acetylation has a preference for aminoisobutyric acid. Alamethicin formation on the synthetase is terminated by linkage of phenylalaninol to the carboxyl terminus of the peptide. It is unlikely that the amino alcohol is a degradation product of alamethicin or that it had been split off from the synthetase complex. Thus it is probably the reaction product of a separate enzyme system.