A gene (cpd1) coding for the dimethylallyltryptophan synthase (DMATS) that catalyzes the first specific step in the biosynthesis of ergot alkaloids, was cloned from a strain of Claviceps purpurea that produces alkaloids in axenic culture. The derived gene product (CPD1) shows only 70% similarity to the corresponding gene previously isolated from Claviceps strain ATCC 26245, which is likely to be an isolate of C. fusiformis. Therefore, the related cpd1 most probably represents the first C. purpurea gene coding for an enzymatic step of the alkaloid biosynthetic pathway to be cloned. Analysis of the 3'-flanking region of cpd1 revealed a second, closely linked ergot alkaloid biosynthetic gene named cpps1, which codes for a 356-kDa polypeptide showing significant similarity to fungal modular peptide synthetases. The protein contains three amino acid-activating modules, and in the second module a sequence is found which matches that of an internal peptide (17 amino acids in length) obtained from a tryptic digest of lysergyl peptide synthetase 1 (LPS1) of C. purpurea, thus confirming that cpps1 encodes LPS1. LPS1 activates the three amino acids of the peptide portion of ergot peptide alkaloids during D-lysergyl peptide assembly. Chromosome walking revealed the presence of additional genes upstream of cpd1 which are probably also involved in ergot alkaloid biosynthesis: cpox1 probably codes for an FAD-dependent oxidoreductase (which could represent the chanoclavine cyclase), and a second putative oxidoreductase gene, cpox2, is closely linked to it in inverse orientation. RT-PCR experiments confirm that all four genes are expressed under conditions of peptide alkaloid biosynthesis. These results strongly suggest that at least some genes of ergot alkaloid biosynthesis in C. purpurea are clustered, opening the way for a detailed molecular genetic analysis of the pathway.