The anhydrotetracycline (ATC) oxygenase enzyme which carries out the conversion of ATC to dehydrotetracycline was purified and the N-terminal amino acid sequence was determined. The sequence displays a significant similarity to that of the p-hydroxybenzoate hydroxylase from Pseudomonas fluorescens. This is consistent with the activity of the oxygenase, i.e., addition of a hydroxyl moiety to an aromatic ring structure.Oligonucleotide probes were designed and used to clone the corresponding fragment of chromosomal DNA from Streptomyces rimosus. This DNA fragment was used to screen a cosmid library, allowing the isolation of flanking DNA sequences. Surprisingly, the gene was located within the previously cloned cluster of genes involved in the synthesis of the biosynthetic intermediate ATC and not as had been expected (P. M. Rhodes, N. Winskill, E. J. Friend, and M. Warren, J. Gen. Microbiol. 124:329-338, 1981) at a separate locus on the other side of the chromosome. Subcloning of an appropriate DNA fragment from one of the cosmid clones onto pIJ916 produced Streptomyces lividans transformants which synthesized oxytetracycline.Oxytetracyline (OTC) is a commercially important broadspectrum antibiotic produced by Streptomyces rimosus. OTC is a member of the polyketide class of antibiotics which includes, among others, avermectin, monensin, erythromycin, and other tetracyclines such as 7-chlorotetracycline.The OTC biosynthetic pathway of S. rimosus has been the subject of both biochemical and genetic analysis (15). Figure 1 indicates the proposed biosynthetic pathway from malonyl coenzyme A to the final product. The isolation and characterization of mutants blocked at various points in the pathway indicated that the genes involved in OTC biosynthesis are clustered into two distinct positions mapping at diametrically opposite locations on the circular map of S. rimosius.The loci thought to be responsible for all pathway steps leading to the production of anhydrotetracycline (ATC) were assigned to the "4 o'clock" locus, whereas the genes encoding enzymes for the final part of the pathway, including those responsible for the production of a flavinlike cofactor (cosynthetic factor 1 [CSF1]) were assigned to a 10 o'clock location.The isolation (3; M. J. Butler, E. J. Friend, I. S. Hunter, F. S. Kaczmarek, D. A. Sugden, and M. Warren, Mol. Gen. Genet., in press) of two genes, otrA and otrB, involved in host resistance to OTC and the analysis of flanking DNA indicated that the 4 o'clock cluster was organized as a single group of biosynthetic genes flanked by the two resistance loci (Fig. 2). However, the genes responsible for the conversion of ATC to OTC remained unidentified. This paper describes the isolation of the gene (otcC) encoding the ATC oxygenase, the enzyme catalyzing the hydroxylation of ATC to dehydrotetracycline. otcC (7) except that S. lividans mycelium was grown for 3 days instead of 2 days in YEME medium containing glycine and MgCl2 at 0.5% and 5 mM, respectively. S. rimosus protoplast formation, regener...