(setamycin) produced by Kitasatospora setae KM-6054 belong to the plecomacrolide family, which exhibit antibacterial, antifungal, antineoplastic and immunosuppressive activities. An analysis of gene clusters from K. setae KM-6054 governing the biosynthesis of bafilomycins revealed that it contains five large open reading frames (ORFs) encoding the multifunctional polypeptides of bafilomycin polyketide synthases (PKSs). These clustered PKS genes, which are responsible for bafilomycin biosynthesis, together encode 11 homologous sets of enzyme activities, each catalyzing a specific round of polyketide chain elongation. The region contains an additional 13 ORFs spanning a distance of 73 287 bp, some of which encode polypeptides governing other key steps in bafilomycin biosynthesis. Five ORFs, BfmB, BfmC, BfmD, BfmE and BfmF, were involved in the formation of methoxymalonyl-acyl carrier protein (ACP). Two possible regulatory genes, bfmR and bfmH, were found downstream of the above genes. A gene-knockout analysis revealed that BfmR was only a transcriptional regulator for the transcription of bafilomycin biosynthetic genes. Two genes, bfmI and bfmJ, were found downstream of bfmH. An analysis of these gene-disruption mutants in addition to an enzymatic analysis of BfmI and BfmJ revealed that BfmJ activated fumarate and BfmI functioned as a catalyst to form a fumaryl ester at the C21 hydroxyl residue of bafilomycin A 1 . A comparative analysis of bafilomycin gene clusters in K. setae KM-6054, Streptomyces lohii JCM 14114 and Streptomyces griseus DSM 2608 revealed that each ORF of both gene clusters in two Streptomyces strains were quite similar to each other. However, each ORF of gene cluster in K. setae KM-6054 was of lower similarity to that of corresponding ORF in the two Streptomyces species.