Analysis of a 32.8-kb segment of DNA from the rapamycin (Rp) producer, Streptomyces hygroscopicus ATCC 29253, revealed a new type-I polyketide synthase (PKS) cluster consisting of four open reading frames (ORF 1-4), each encoding a single PKS module. The four ORFs are transcribed in the same direction and are flanked by several smaller ORFs (ORF 5-9), which may be related to the PKS cluster. The first PKS-containing ORF has a ligase domain at the N-terminus of the polypeptide. This domain has 55% aa identity to the CoA ligase domain of the Rp PKS (Schwecke et al., 1995. Proc. Natl. Acad. Sci. 92, 7839-7843) which is also encoded in this strain (Lowden et al., 1996. Angew. Chem. Int. Ed. Engl. 35, 2249-2251). ORF5 (340 aa) and ORF6 (924 aa) were found to be homologous to RapK (41% aa identity) and RapH (35% aa identity), which are hypothesized to be a pteridine-dependent dioxygenase and a regulatory protein, respectively (Molnar et al., 1996. Gene 169, 1-7). In addition, ORF7 (391 aa) was found to have up to 42% aa identity to a number of plant 3-deoxy-D-arabino-heptulosonate-7-phosphate synthases (DAHPS) and 47% aa identity to PhzF, a bacterial DAHPS involved in phenazine antibiotic synthesis. The proximity of the DAHPS-encoding gene to the PKS cluster containing a Rp-like ligase domain suggests that a derivative of shikimate may be used as the PKS starter. ORF8 (283 aa) was found to have homology (32% aa identity) to a Synechocystis sp. gene of unknown function. The N-terminal portion of ORF9 was found to be similar to a tetracycline 6-hydroxylase (34% aa identity) from Streptomyces aureofaciens.