The macrolide antibiotic concanamycin A has been identified as an exceptionally potent inhibitor of the vacuolar (V-type) ATPase. Such compounds have been mooted as the basis of a potential drug treatment for osteoporosis, since the V-ATPase is involved in the osteoclast-mediated bone resorption that underlies this common condition. To enable combinatorial engineering of altered concanamycins, the biosynthetic gene cluster governing the biosynthesis of concanamycin A has been cloned from Streptomyces neyagawaensis and shown to span a region of over 100 kbp of contiguous DNA. An efficient transformation system has been developed for S. neyagawaensis and used to demonstrate the role of the cloned locus in the formation of concanamycin A. Sequence analysis of the 28 ORFs in the region has revealed key features of the biosynthetic pathway, in particular the biosynthetic origin of portions of the backbone, which arise from the unusual polyketide building blocks ethylmalonyl-CoA and methoxymalonyl-ACP, and the origin of the pendant deoxysugar moiety 4'-O-carbamoyl-2'-deoxyrhamnose, as well as the presence of a modular polyketide synthase (PKS) encoded by six giant ORFs. Examination of the methoxymalonyl-specific acyltransferase (AT) domains has led to recognition of an amino acid sequence motif which can be used to distinguish methylmalonyl-CoA- from methoxymalonyl-ACP-specific AT domains in natural PKSs.