Albonoursin [cyclo(deltaPhe-DeltaLeu)], an antibacterial peptide produced by Streptomyces noursei, is one of the simplest representatives of the large diketopiperazine (DKP) family. Formation of alpha,beta unsaturations was previously shown to occur on cyclo(L-Phe-L-Leu), catalyzed by the cyclic dipeptide oxidase (CDO). We used CDO peptide sequence information to isolate a 3.8 kb S. noursei DNA fragment that directs albonoursin biosynthesis in Streptomyces lividans. This fragment encompasses four complete genes: albA and albB, necessary for CDO activity; albC, sufficient for cyclic dipeptide precursor formation, although displaying no similarity to non ribosomal peptide synthetase (NRPS) genes; and albD, encoding a putative membrane protein. This first isolated DKP biosynthetic gene cluster should help to elucidate the mechanism of DKP formation, totally independent of NRPS, and to characterize novel DKP biosynthetic pathways that could be engineered to increase the molecular diversity of DKP derivatives.