Oleandomycin, a macrolide antibiotic produced by Streptomyces antibioticus, contains two sugars attached to the aglycon: L-oleandrose and D-desosamine. oleY codes for a methyltransferase involved in the biosynthesis of L-oleandrose. This gene was overexpressed in Escherichia coli to form inclusion bodies and in Streptomyces lividans, producing a soluble protein. S. lividans overexpressing oleY was used as a biotransformation host, and it converted the precursor L-olivosyl-erythronolide B into its 3-O-methylated derivative, L-oleandrosyl-erythronolide B. Two other monoglycosylated derivatives were also substrates for the OleY methyltransferase: L-rhamnosyl- and L-mycarosyl-erythronolide B. OleY methyltransferase was purified yielding a 43-kDa single band on sodium dodecyl sulfate-polyacrylamide gel electrophoresis. The native enzyme showed a molecular mass of 87 kDa by gel filtration chromatography, indicating that the enzyme acts as a dimer. It showed a narrow pH range for optimal activity, and its activity was clearly stimulated by the presence of several divalent cations, being maximal with Co(2+). The S. antibioticus OleG2 glycosyltransferase is proposed to transfer L-olivose to the oleandolide aglycon, which is then converted into L-oleandrose by the OleY methyltransferase. This represents an alternative route for L-oleandrose biosynthesis from that in the avermectin producer Streptomyces avermitilis, in which L-oleandrose is transferred to the aglycon by a glycosyltransferase.