As is often the case for microbial product formation, the penicillin production rate of Penicillium chrysogenum has been observed to be a function of the growth rate of the organism. The relation between the biomass specific rate of penicillin formation (q(p)) and growth rate (mu) has been measured under steady state conditions in carbon limited chemostats resulting in a steady state q(p)(mu) relation. Direct application of such a relation to predict the rate of product formation during dynamic conditions, as they occur, for example, in fed-batch experiments, leads to errors in the prediction, because q(p) is not an instantaneous function of the growth rate but rather lags behind because of adaptational and regulatory processes. In this paper a dynamic gene regulation model is presented, in which the specific rate of penicillin production is assumed to be a linear function of the amount of a rate-limiting enzyme in the penicillin production pathway. Enzyme activity assays were performed and strongly indicated that isopenicillin-N synthase (IPNS) was the main rate-limiting enzyme for penicillin-G biosynthesis in our strain. The developed gene regulation model predicts the expression of this rate limiting enzyme based on glucose repression, fast decay of the mRNA encoding for the enzyme as well as the decay of the enzyme itself. The gene regulation model was combined with a stoichiometric model and appeared to accurately describe the biomass and penicillin concentrations for both chemostat steady-state as well as the dynamics during chemostat start-up and fed-batch cultivation.