Virginiamycin M (VM) of Streptomyces virginiae is a hybrid polyketide-peptide antibiotic with peptide antibiotic virginiamycin S (VS) as its synergistic counterpart. VM and VS belong to the Streptogramin family, which is characterized by strong synergistic antibacterial activity, and their water-soluble derivatives are a new therapeutic option for combating vancomycin-resistant Gram-positive bacteria. Here, the VM biosynthetic gene cluster was isolated from S. virginiae in the 62-kb region located in the vicinity of the regulatory island for virginiamycin production. Sequence analysis revealed that the region consists of 19 complete open reading frames (ORFs) and one C-terminally truncated ORF, encoding hybrid polyketide synthase (PKS)-nonribosomal peptide synthetase (NRPS), typical PKS, enzymes synthesizing precursors for VM, transporters for resistance, regulatory proteins, and auxiliary enzymes. The involvement of the cloned gene cluster in VM biosynthesis was confirmed by gene disruption of virA encoding a hybrid PKS-NRPS megasynthetase, which resulted in complete loss of VM production without any effect on VS production. To assemble the VM core structure, VirA, VirF, VirG, and VirH consisting, as a whole, of 24 domains in 8 PKS modules and 7 domains in 2 NRPS modules were predicted to act as an acyltransferase (AT)-less hybrid PKS-NRPS, whereas VirB, VirC, VirD, and VirE are likely to be essential for the incorporation of the methyl group into the VM framework by a HMG-CoA synthase-based reaction. Among several uncommon features of gene organization in the VM gene cluster, the lack of AT domain in every PKS module and the presence of a discrete AT encoded by virI are notable. AT-overexpression by an additional copy of virI driven by ermEp() resulted in 1.5-fold increase of VM production, suggesting that the amount of VirI is partly limiting VM biosynthesis.