The DNA sequence of about 5.9 kilobase pairs (kbp) of the gramicidin S biosynthesis operon (grs) was determined. Three open reading frames were identified; the corresponding genes, called grsT, grsA, and grsB, were found to be organized in one transcriptional unit, not two as previously reported (M. Krause and M. A. Marahiel, J. Bacteriol. 170:4669-4674, 1988). The entire nucleotide sequence of grsA, coding for the 126.663-kilodalton gramicidin S synthetase 1, grsT, encoding a 29.191-kilodalton protein of unknown function, and 732 bp of the 5' end of grsB, encoding the gramicidin S synthetase 2, were determined. A single initiation site of transcription 81 bp upstream of the grsT initiation condon GTG was identified by high-resolution S1 mapping studies. The sequence of the grsA gene product showed a high degree of homology to the tyrocidine synthetase 1 (TycA protein), and that of grsT exhibited a significant degree of homology to vertebrate fatty acid thioesterases.