Analysis of a 32.8-kb segment of DNA from the rapamycin (Rp) producer, Streptomyces hygroscopicus ATCC 29253, revealed a new type-I polyketide synthase (PKS) cluster consisting of four open reading frames (ORF 1–4), each encoding a single PKS module. The four ORFs are transcribed in the same direction and are flanked by several smaller ORFs (ORF 5–9), which may be related to the PKS cluster. The first PKS-containing ORF has a ligase domain at the N-terminus of the polypeptide. This domain has 55% aa identity to the CoA ligase domain of the Rp PKS ( Schwecke et al., 1995. Proc. Natl. Acad. Sci. 92, 7839–7843) which is also encoded in this strain ( Lowden et al., 1996. Angew. Chem. Int. Ed. Engl. 35, 2249–2251). ORF5 (340 aa) and ORF6 (924 aa) were found to be homologous to RapK (41% aa identity) and RapH (35% aa identity), which are hypothesized to be a pteridine-dependent dioxygenase and a regulatory protein, respectively ( Molnar et al., 1996. Gene 169, 1–7). In addition, ORF7 (391 aa) was found to have up to 42% aa identity to a number of plant 3-deoxy- d- arabino-heptulosonate-7-phosphate synthases (DAHPS) and 47% aa identity to PhzF, a bacterial DAHPS involved in phenazine antibiotic synthesis. The proximity of the DAHPS-encoding gene to the PKS cluster containing a Rp-like ligase domain suggests that a derivative of shikimate may be used as the PKS starter. ORF8 (283 aa) was found to have homology (32% aa identity) to a Synechocystis sp. gene of unknown function. The N-terminal portion of ORF9 was found to be similar to a tetracycline 6-hydroxylase (34% aa identity) from Streptomyces aureofaciens.