The pur3 gene of the puromycin ( pur) cluster from Streptomyces alboniger is essential for the biosynthesis of this antibiotic. Cell extracts from Streptomyces lividans containing pur3 had monophosphatase activity versus a variety of mononucleotides including 3′-amino-3′-dAMP (3′-N-3′-dAMP), ( N 6, N 6)-dimethyl-3′-amino-3′-dAMP (PAN-5′-P) and AMP. This is in accordance with the high similarity of this protein to inositol monophosphatases from different sources. Pur3 was expressed in Escherichia coli as a recombinant protein and purified to apparent homogeneity. Similar to the intact protein in S. lividans, this recombinant enzyme dephosphorylated a wide variety of substrates for which the lowest K m values were obtained for the putative intermediates of the puromycin biosynthetic pathway 3′-N-3′-dAMP ( K m = 1.37 mM) and PAN-5′-P ( K m = 1.40 mM). The identification of this activity has allowed the revision of a previous proposal for the puromycin biosynthetic pathway.