Vectors which possess a truncated niaD gene encoding nitrate reductase were developed to allow targeted gene integration during transformation of an niaD mutant Penicillium chrysogenum host. The Penicillium genes pcbC and penAB are immediately adjacent to each other and are divergently transcribed, with an intergenic control region serving as their promoters. Gene fusions were constructed with a reporter gene, uidA, which encodes beta-glucuronidase. The pcbC-penAB intergenic region was fused to the uidA gene in both orientations so that regulated expression of each structural gene could be investigated. These fusion genes were targeted to the chromosomal site of the niaD locus of P. chrysogenum, and their expression was examined under different growth conditions. The expression of each of these penicillin biosynthesis genes was found to be regulated by nitrogen repression, glucose repression, and growth stage control.