The biosynthesis of the decapeptide antibiotic gramicidin S in Bacillus brevis ATCC 9999 is catalyzed by a multienzyme system consisting of two multifunctional proteins, gramicidin S synthetase 1 and 2, encoded by the grsA and grsB genes, respectively. Gramicidin S synthetase 1 (phenylalanine racemase, EC 5.1.1.11, GS1) racemizes phenylalanine in the thioester-bound stage. The amount of 4'-phosphopantetheine liberated from highly purified GS1 was determined microbiologically using Lacto-bacillus plantarum as the test organism. It matches exactly with the amount of L-[14C]phenylalanine covalently incorporated by GS1 as thioester. The reaction center of GS1 for L-phenylalanine thiolation and racemization was labeled with [3H]iodoacetic acid. After tryptic fragmentation of the 3H-carboxymethylated enzyme, the active site peptide for thioester binding and racemization of phenylalanine was isolated in pure form by multistep methodology and investigated by sequence, amino acid, and mass spectrometric analysis. A 4'-phosphopantetheine carrier was found to be attached to the active site serine of the consensus motif LGGDSI forming the thiolation site of phenylalanine. These specific properties establish GS1 as a prototype of amino acid racemases using 4'-phosphopantetheine as a cofactor and yield further evidence that multiple Pan carriers are involved in gramicidin S formation. Our results are strong evidence for the "multiple carrier model" as a new concept of nonribosomal peptide biosynthesis at protein templates as recently proposed [Stein, T., et al. (1994) FEBS Lett. 340, 39-44].