The biosynthesis of the aromatic polyene macrolide antibiotic candicidin, produced by Streptomyces griseus IMRU 3570, begins with a p-aminobenzoic acid (PABA) molecule which is activated to PABA-CoA and used as starter for the head-to-tail condensation of four propionate and 14 acetate units to produce a polyketide molecule to which the deoxysugar mycosamine is attached. Using the gene coding for the PABA synthase (pabAB) from S. griseus IMRU 3570 as the probe, a 205-kb region of continuous DNA from the S. griseus chromosome was isolated and partially sequenced. Some of the genes possibly involved in the biosynthesis of candicidin were identified including part of the modular polyketide synthase (PKS), genes for thioesterase, deoxysugar biosynthesis, modification, transport, and regulatory proteins. The regulatory mechanisms involved in the production of candicidin, such as phosphate regulation, were studied using internal probes for some of the genes involved in the biosynthesis of the three moieties of candicidin (PKS, aromatic moiety and amino sugar). mRNAs specific for these genes were detected only in the production medium (SPG) but not in the SPG medium supplemented with phosphate or in the inoculum medium, indicating that phosphate represses the expression of genes involved in candicidin biosynthesis. The modular architecture of the candicidin PKS and the availability of the PKSs involved in the biosynthesis of three polyene antibiotics (pimaricin, nystatin, and amphotericin 13) shall make possible the creation of new, less toxic and more active polyene antibiotics through combinatorial biosynthesis and targeted mutagenesis.