The regulation of the Aspergillus nidulans penicillin biosynthesis gene aat (penDE), which encodes acyl coenzyme A:6-aminopenicillanic acid acyltransferase (AAT), was analysed. Major transcriptional start sites map within 100 nucleotides upstream from the aat initiation codon. To study the regulation of aat expression, various aat-lacZ gene fusions were constructed, in which the aat promoter region was fused in frame with the Escherichia coli lacZ reporter gene. A. nidulans strains carrying recombinant plasmids integrated as single copies at the chromosomal argB locus were identified. In both fermentation and minimal media, aat-lacZ expression was maximal during the first 24 h of a fermentation run. Compared with minimal medium, aat-lacZ expression was increased two-fold in fermentation medium. Although AAT specific activity was reduced in mycelia grown on glucose instead of lactose, expression of aat-lacZ gene fusions was not repressed on glucose, suggesting that the glucose effect is mediated posttranscriptionally. The effect of glucose on AAT activity was reversed by further incubation of glucose-grown mycelia on lactose. Neither the inclusion of the first intron of the aat gene in the aat-lacZ fusion integrated at the chromosomal argB locus, nor the disruption of the acvA gene had any regulatory effect on aat-lacZ expression. In the heterologous, nonpenicillin producer A. niger, basal expression of aat-lacZ gene fusions was observed at about the same level as in A. nidulans.