The enhancement of industrial antibiotic yield has been achieved through technological innovations and traditional strain improvement programs based on random mutation and screening. The development of recombinant DNA techniques and their application to antibiotic producing microorganisms has allowed yield increments and the design of biosynthetic pathways giving rise to new antibiotics. Genetic manipulations of the cephalosporin producing fungus Cephalosporium acremonium have included yield improvements, accomplished increasing biosynthetic gene dosage or enhancing oxygen uptake, and new biosynthetic capacities as 7-aminocephalosporanic acid (7-ACA) or penicillin G production. Similarly, in Penicillium chrysogenum, the industrial penicillin producing fungus, heterologous expression of cephalosporin biosynthetic genes has led to the biosynthesis of adipyl-7-aminodeacetoxycephalosporanic acid (adipyl-7-ADCA) and adipyl-7-ACA, compounds that can be transformed into the economically relevant 7-ADCA and 7-ACA intermediates. Escherichia coil expression of the genes encoding D-amino acid oxidase and cephalosporin acylase activities has simplified the bioconversion of cephalosporin C into 7-ACA, eliminating the use of organic solvents. The genetic manipulation of antibiotic producing actinomycetes has allowed productivity increments and the development of new hybrid antibiotics. A legal framework has been developed for the confined manipulation of genetically modified organisms.