Rare actinomycetes are likely treasure troves for bioactive natural products, and it is therefore important that we enrich our understanding of biosynthetic potential of these relatively understudied bacteria. Dactylosporangium are a genus of such rare Actinobacteria that are known to produce a number of important antibacterial compounds, but for which there are still no fully assembled reference genomes, and where the extent of encoded biosynthetic capacity is not defined. Dactylosporangium vinaceum (NRRL B-16297) is known to readily produce a deep wine red-coloured diffusible pigment of unknown origin, and it was decided to define the chemical identity of this natural product pigment, and in parallel use whole genome sequencing and transcriptional analysis to lay a foundation for understanding the biosynthetic capacity of these bacteria. Results show that the produced pigment is made of various rubrolone conjugates, the spontaneous product of the reactive pre-rubrolone, produced by the bacterium. Genome and transcriptome analysis identified the highly expressed biosynthetic gene cluster (BGC) for pre-rubrolone. Further analysis of the fully assembled genome found it to carry 24 additional BGCs, of which the majority were poorly transcribed, confirming the encoded capacity of this bacterium to produce natural products but also illustrating the main bottleneck to exploiting this capacity. Finally, analysis of the potential environmental role of pre-rubrolone found it to react with a number of amine containing antibiotics, antimicrobial peptides and siderophores pointing to its potential role as a "minesweeper" of xenobiotic molecules in the bacterial environment. KEY POINTS: • D. vinaceum encodes many BGC, but the majority are transcriptionally silent. • Chemical screening identifies molecules that modulate rubrolone production. • Pre-rubrolone is efficient at binding and inactivating many natural antibiotics.