The polyene macrolide antibiotic nystatin, produced commercially by the bacterium Streptomyces noursei, is an important antifungal agent used in human therapy for treatment of certain types of mycoses. Early studies on nystatin biosynthesis in S. noursei provided important information regarding the precursors utilised in nystatin biosynthesis and factors affecting antibiotic yield. New insights into the enzymology of nystatin synthesis became available after the gene cluster governing nystatin biosynthesis in S. noursei was cloned and analysed. Six large polyketide synthase proteins were implicated in the formation of the nystatin macrolactone ring, while other enzymes, such as P450 monooxygenases and glycosyltransferase, were assumed responsible for ring "decoration". The latter data, supported by analysis of the polyene mixture synthesised by the nystatin producer, helped elucidate the complete nystatin biosynthetic pathway. This information has proved useful for engineered biosynthesis of novel nystatin analogues, suggesting a plausible route for the generation of potentially safer and more efficient antifungal drugs.