Phenoxazinone synthase (PHS) is one enzyme that has been implicated in the biosynthesis of actinomycin in Streptomyces antibioticus. The gene for the 88,000 Mr subunit of PHS has been cloned and has been used to study the regulation of the enzyme in S. antibioticus. The expression of the enzyme in growing cultures is regulated at the transcriptional and posttranscriptional levels, and glucose repression of PHS synthesis also involves control at the level of mRNA synthesis. Interestingly, the transformation of S. antibioticus with a multicopy plasmid containing the cloned PHS gene leads to the premature cessation of mycelial growth and actinomycin production. Two other fragments of the S. antibioticus genome have been cloned and these fragments may be involved in the regulation of antibiotic synthesis in the donor organism and in other streptomycetes. These fragments appear to function by activating a normally silent PHS gene in the cloning host employed in these experiments, Streptomyces lividans. The implications of these results are discussed.