Mutations in the Streptomyces peucetius dnrD gene block the ring cyclization leading from aklanonic acid methyl ester (AAME) to aklaviketone (AK), an intermediate in the biosynthetic pathway to daunorubicin (DNR) and doxorubicin. To investigate the role of DnrD in this transformation, its gene was overexpressed in Escherichia coli and the DnrD protein was purified to homogeneity and characterized. The enzyme was shown to catalyze the conversion of AAME to AK presumably via an intramolecular aldol condensation mechanism. In contrast to the analogous intramolecular aldol cyclization catalyzed by the TcmI protein from the tetracenomycin (TCM) C pathway in Streptomyces glaucescens, where a tricyclic anthraquinol carboxylic acid is converted to its fully aromatic tetracyclic form, the conversion catalyzed by DnrD occurs after anthraquinone formation and requires activation of a carboxylic acid group by esterification of aklanonic acid, the AAME precursor. Also, the cyclization is not coupled with a subsequent dehydration step that would result in an aromatic ring. As the substrates for the DnrD and TcmI enzymes are among the earliest isolable intermediates of aromatic polyketide biosynthesis, an understanding of the mechanism and active site topology of these proteins will allow one to determine the substrate and mechanistic parameters that are important for aromatic ring formation. In the future, these parameters may be able to be applied to some of the earlier polyketide cyclization processes that currently are difficult to study in vitro.