The final step in the biosynthesis of ,B-lactam antibiotics in Penicilium chrysogenum and AspergiUus nidulans involves removal of the L-a-aminoadipyl side chain from isopenicillin N (IPN) and exchange with a nonpolar side chain. The enzyme catalyzing this reaction, acyl-coenzyme A:isopenicillin N acyltransferase (acyltransferase), was purified from P. chrysogenum and A. nidulans. Based on NH2-terminal amino acid sequence information, the acyltransferase gene (penDE) from P. chrysogenum and A. nidulans were cloned. In both organisms, penDE was located immediately downstream from the isopenicillin N synthetase gene (pcbC) and consisted of four exons encoding an enzyme of 357 amino acids Over the last two decades, workers in several laboratories (1,9,10,13,14,23) have investigated the production of semisynthetic penicillins in Penicillium chrysogenum by exchange of the a-aminoadipyl side chain of isopenicillin N (IPN), an obligate intermediate (18), with one of many acyl-coenzyme A (acylCoA) substituents derived from exogenously added monosubstituted acetic acids. In the absence of these derivatives, 6-aminopenicillanic acid (6-APA) production increases as well as penicillins with side chains derived from the endogenous monosubstituted acetic acids (e.g., penicillin G [PenG] from phenylacetic acid). Queener and Neuss (18) proposed a model (Fig. 1) for the conversion of IPN to penicillins and suggested the existence of a two-step enzymatic process. However, it has been unclear whether a single enzyme (acylCoA:6-APA acyltransferase [AT]) can directly accept IPN as a substrate and exchange side chains (i.e., it contains IPN amidolyase activity and is multifunctional).Alvarez et al. (2) and Alonso et al.(1) have independently purified AT to apparent homogeneity as a monomeric protein with an Mr of approximately 29,000 as judged by gel chromatography. However, the latter authors did not report activity with IPN, and the former found that the specific activity with IPN was nearly sevenfold lower than with 6-APA, even in the crude extract. Luengo et al. (13) substrate specificity. Therefore, the reaction to produce nonpolar penicillins and the enzyme(s) necessary for this activity remained unclear.Recently, Veenstra et al. (24) and Barredo et al. (3), using the N-terminal amino acid sequence of the putative AT protein (29 kilodaltons [kDa]) from P. chrysogenum, generated a mixed oligonucleotide probe and cloned DNA that complemented mutants of P. chrysogenum Wis54-1255 (2). These mutants were reported to have little or no AT activity. By further molecular characterization, the code for the 29-kDa protein was demonstrated in the DNA sequence. The N-terminal sequence of an 11-kDa protein that was present after a several-hundred-fold purification of the 29-kDa protein was also encoded in the cloned DNA sequence (24, 25a).Moreover, the gene coding for IPN synthetase (pcbC [5]) in P. chrysogenum is also closely linked to penDE (8,24). Sequence and preliminary transcription analysis indicated that penDE contains introns and c...