Most terpenoids have been isolated from plants and fungi and only a few from bacteria. However, an increasing number of genome sequences indicate that bacteria possess a variety of terpenoid cyclase genes. We characterized a sesquiterpene cyclase gene (SGR2079, named gcoA) found in Streptomyces griseus. When expressed in Streptomyces lividans, gcoA directed production of a sesquiterpene, isolated and determined to be (؉)-caryolan-1-ol using spectroscopic analyses. (؉)-Caryolan-1-ol was also detected in the crude cell lysate of wild-type S. griseus but not in a gcoA knockout mutant, indicating that GcoA is a genuine (؉)-caryolan-1-ol synthase. Enzymatic properties were characterized using N-terminally histidine-tagged GcoA, produced in Escherichia coli. As expected, incubation of the recombinant GcoA protein with farnesyl diphosphate yielded (؉)-caryolan-1-ol. However, a small amount of another sesquiterpene was also detected. This was identified as the bicyclic sesquiterpene hydrocarbon (؉)--caryophyllene by comparison with an authentic sample using GC-MS. Incorporation of a deuterium atom into the C-9 methylene of (؉)-caryolan-1-ol in an in vitro GcoA reaction in deuterium oxide indicated that (؉)-caryolan-1-ol was synthesized by a proton attack on the C-8/C-9 double bond of (؉)--caryophyllene. Several -caryophyllene synthases have been identified from plants, but these cannot synthesize caryolan-1-ol. Although caryolan-1-ol has been isolated previously from several plants, the enzyme responsible for its biosynthesis has not been identified previously. GcoA is thus the first known caryolan-1-ol synthase. Isolation of caryolan-1-ol from microorganisms is unprecedented.Terpenoids are the largest family of natural products, including over 24,000 known compounds. They have various biological functions and act as flavorings, pigments, antibiotics, hormones, and antitumor agents. Most terpenoids have been isolated from plants and fungi and only a few from bacteria. All terpenoids are derived from the C 5 precursors isopentenyl diphosphate and dimethylallyl diphosphate. The successive condensation of isopentenyl diphosphate and dimethylallyl diphosphate gives rise to linear isoprenyl diphosphate precursors of various chain lengths, such as geranyl diphosphate (C 10 ), farnesyl diphosphate (FPP, 2 C 15 ), and geranylgeranyl diphosphate (C 20 ). These linear substrates are generally cyclized by terpenoid cyclases to produce the parent skeletons of monoterpenes (C 10 ), sesquiterpenes (C 15 ), diterpenes (C 20 ), and other homologs. Terpenoid cyclases are therefore the first key enzymes in pathways leading to the diverse range of terpenoids. A large number of terpenoid cyclases have been reported from eukaryotes, and these have been studied extensively (1, 2). In contrast, at present there are only a small number of reports of bacterial terpenoid cyclases. Most of the bacterial terpenoid cyclases reported are sesquiterpene cyclases (SCs). Bacterial SCs show no significant amino acid sequence identity with eukaryotic S...