Polyene macrolide antibiotics, including nystatin and amphotericin B, possess fungicidal activity and are being used as antifungal agents to treat both superficial and invasive fungal infections. Due to their toxicity, however, their clinical applications are relatively limited, and new-generation polyene macrolides with an improved therapeutic index are highly desirable. We subjected the polyol region of the heptaene nystatin analogue S44HP to biosynthetic engineering designed to remove and introduce hydroxyl groups in the C-9-C-10 region. This modification strategy involved inactivation of the P450 monooxygenase NysL and the dehydratase domain in module 15 (DH15) of the nystatin polyketide synthase. Subsequently, these modifications were combined with replacement of the exocyclic C-16 carboxyl with the methyl group through inactivation of the P450 monooxygenase NysN. Four new polyene macrolides with up to three chemical modifications were generated, produced at relatively high yields (up to 0.51 g/liter), purified, structurally characterized, and subjected to in vitro assays for antifungal and hemolytic activities. Introduction of a C-9 hydroxyl by DH15 inactivation also blocked NysL-catalyzed C-10 hydroxylation, and these modifications caused a drastic decrease in both antifungal and hemolytic activities of the resulting analogues. In contrast, single removal of the C-10 hydroxyl group by NysL inactivation had only a marginal effect on these activities. Results from the extended antifungal assays strongly suggested that the 9-hydroxy-10-deoxy S44HP analogues became fungistatic rather than fungicidal antibiotics.