Actinomycin Synthetase II (ACMS II), which activates threonine and valine by a thioltemplate mechanism during the synthesis of the actinomycin half-molecule 4-methyl-3-hydroxyanthranilic acid (4-MHA) pentapeptide lactone, was purified to near homogeneity from Streptomyces chrysomallus. It is a single polypeptide chain of M(r) 280,000 and contains 4'-phosphopantetheine as a covalently bound prosthetic group. ACMS II charges itself with threonine but not with the 4-MHA analogue p-toluic acid via a specific sulfhydryl group at the expense of ATP. Charging of ACMS II with p-toluic acid in thioester linkage took place, however, only when actinomycin synthetase I (ACMS I), a 4-MHA-AMP ligase, was present. In the additional presence of L-threonine, enzyme-bound p-toluyl-L-threonine was formed on ACMS II. The latter compound was also formed when chemically synthesized p-toluic acid adenylate was added instead of ACMS I and p-toluic acid. This indicates that p-toluic acid adenylate is a free intermediate in the reaction and that charging of the enzyme and acylation of threonine are both catalyzed by ACMS II rather than by ACMS I. Chemically synthesized thioesters of p-toluic acid and coenzyme A, pantetheine, or beta-alanyl-cysteamine reacted with ACMS II, threonine, and ATP with formation of enzyme-bound p-toluyl-threonine. In contrast, p-toluyl-cysteamine thioester was inactive, which indicates structural constraints in the reactivity of free thioesters of p-toluic acid with ACMS II. Such constraints obviously require structural similarity of the artificial substrate to a p-toluic acid thioester formed on the enzyme's surface in the course of the reaction. Since free coenzyme A was not involved in the charging of p-toluic acid or in p-toluyl-threonine formation, the sulfhydryl group of the 4'-phosphopantetheine cofactor is most likely the primary acceptor of p-toluic acid (or 4-MHA) in the initiation of peptide lactone formation.