A 4-kb BamHI fragment of Streptomyces viridochromogenes Tü494 carrying phosphinothricin-tripeptide (PTT) biosynthetic genes has been identified by complementation of a nonproducing mutant which is defective in the tripeptide formation step. Nucleotide sequence analysis revealed one incomplete and three complete genes on the cloned fragment. The incomplete gene ('pms) codes for the C terminus of the phosphinomethylmalic acid synthase as determined by comparison with a region from the bialaphos biosynthetic cluster [Shimotohno et al., Agric. Biol. Chem. 54 (1990) 463-470] and with databases. Subcloning experiments showed that the juxtaposing phsA gene is sufficient to restore productivity of the blocked mutant. Analysis of gene disruption and gene replacement mutants confirmed that phsA specifies an enzyme involved in tripeptide formation. Similarities to peptide synthetases indicate that the condensation step follows a thio-template mechanism. A conserved region located in the C terminus of the PhsA protein showed identity to 4'-phosphopantetheine-binding sites of fatty acid and polyketide synthases. In the N terminus, a typical acyl transfer motif has been identified and this may be involved in transthiolation. A similar motif also appears in the deduced product of the third gene (dea), which probably catalyses the deacetylation of N-acetyl-PTT to PTT. The previously described PTT resistance-encoding gene (pat) was located between the phsA and the dea genes.