A fermentation strategy, based on the controlled feeding of growth-limiting nutrients in order to maintain metabolic activity for extended periods, has been examined in the case of the production of a hybrid antibiotic by a transformed strain of Streptomyces lividans TK21. The fed-batch operation did not improve the results obtained with batch operation. Continuous cultures on defined medium showed stable levels of biomass concentration, but antibiotic production ceased when continuous operation was started. The results obtained indicate the critical influence that morphology of the cell aggregates has on metabolic activity. The antibiotic is produced only in culture conditions providing growth in compact mycelial pellets.