Malonyl-coenzyme A (malonyl-CoA) decarboxylase is widely distributed in prokaryotes and eukaryotes. However, the biological function of this enzyme has not been established in any organism. To elucidate the structure and function of this enzyme, the malonyl-CoA decarboxylase gene from Saccharopolyspora erythraea (formerly Streptomyces erythreaus) was cloned and sequenced. This gene would encode a polypeptide of 417 amino acids. The deduced amino acid sequence matched the experimentally determined amino acid sequences of 25 N-terminal residues each of the enzyme and of an internal peptide obtained by proteolysis of the purified enzyme. This decarboxylase showed homology with aminoglycoside N6'-acetyltransferases of Pseudomonas aeruginosa, Serratia marcescens, and Klebsiella pneumoniae. Northern (RNA) blot analysis revealed a single transcript. The transcription initiation site was 220 bp upstream of the start codon. When expressed in Escherichia coli, the S. erythraea malonyl-CoA decarboxylase gene yielded a protein that cross-reacted with antiserum prepared against S. erythraea malonyl-CoA decarboxylase and catalyzed decarboxylation of [3-14C]malonyl-CoA to acetyl-CoA and 14CO2. The S. erythraea malonyl-CoA decarboxylase gene was disrupted by homologous recombination using an integrating vector pWHM3. The gene-disrupted transformant did not produce immunologically cross-reacting 45-kDa decarboxylase, lacked malonyl-CoA decarboxylase activity, and could not produce erythromycin. Exogenous propionate restored the ability to produce erythromycin. These results strongly suggest that the decarboxylase provides propionyl-CoA for erythromycin synthesis probably via decarboxylation of methylmalonyl-CoA derived from succinyl-CoA, and therefore the malonyl-CoA decarboxylase gene is designated eryM. The gene disrupted mutants also did not produce pigments.