To characterize a biosynthetic gene that is selectively involved in the biosynthesis of yellow or orange components in the azaphilone polyketide pathway of Monascus. A reductive modification is predicted to control the relative levels of reduced (yellow) and oxidized (orange and red) components in the pathway of azaphilone pigment biosynthesis in Monascus. Targeted inactivation of a reductase gene mppE enhanced orange and red pigment production whereas overexpression of the gene promoted yellow pigment production. The effect of mppE overexpression was dependent on culture methods, and augmented yellow pigmentation was evident in a submerged culture employing a chemically defined medium. MppE controls the biosynthesis of the yellow pigments, ankaflavin and monascin, as a reductive enzyme in the azaphilone polyketide pathway.