The gene cluster (ery) responsible for production of the macrolide antibiotic erythromycin by Saccharopolyspora erythraea is also known to contain ermE, the gene conferring resistance to the antibiotic. The nucleotide sequence has been determined of a 4.5 kb portion of the biosynthetic gene cluster, from a region lying between 3.7 kb and 8.2 kb 3' of ermE. This has revealed the presence of four complete open reading frames, including the previously known ery gene eryG, which catalyses the last step in the biosynthetic pathway. Comparison of the amino acid sequence of EryG with the sequence of other S-adenosylmethionine (SAM)-dependent methyltransferases has revealed that one of the sequence motifs previously suggested to be part of the SAM-binding site is present not only in EryG but also in many other recently sequenced SAM-dependent methyltransferases. Previous genetic studies have shown that this region also contains gene(s) involved in hydroxylation of the intermediate 6-deoxyerythronolide B. One of the three other open reading frames (eryF) in fact shows very high sequence similarity to known cytochrome P450 hydroxylases. An adjacent gene (ORF5) shows a strikingly high degree of similarity to prokaryotic and eukaryotic acyltransferases and thioesterases.