The gram-positive bacterium Streptomyces aureofaciens Tü117 produces the acyclic polyene antibiotic alpha-lipomycin. The entire biosynthetic gene cluster (lip gene cluster) was cloned and characterized. DNA sequence analysis of a 74-kb region revealed the presence of 28 complete open reading frames (ORFs), 22 of them belonging to the biosynthetic gene cluster. Central to the cluster is a polyketide synthase locus that encodes an eight-module system comprised of four multifunctional proteins. In addition, one ORF shows homology to those for nonribosomal peptide synthetases, indicating that alpha-lipomycin belongs to the classification of hybrid peptide-polyketide natural products. Furthermore, the lip cluster includes genes responsible for the formation and attachment of d-digitoxose as well as ORFs that resemble those for putative regulatory and export functions. We generated biosynthetic mutants by insertional gene inactivation. By analysis of culture extracts of these mutants, we could prove that, indeed, the genes involved in the biosynthesis of lipomycin had been cloned, and additionally we gained insight into an unusual biosynthesis pathway.