BACKGROUND Modular polyketide synthases govern the synthesis of a number of medically important antibiotics, and there is therefore great interest in understanding how genetic manipulation may be used to produce hybrid synthases that might synthesize novel polyketides. In particular, we aimed to show whether an individual domain can be replaced by a comparable domain from a different polyketide synthase to form a functional hybrid enzyme. To simplify the analysis, we have used our previously-developed model system DEBS1-TE, consisting of the first two chain-extension modules of the erythromycin-producing polyketide synthase of Saccharopolyspora erythraea. RESULTS We show here that replacing the entire acyltransferase (AT) domain from module 1 of DEBS1-TE by the AT domain from module 2 of the rapamycin-producing polyketide synthase leads, as predicted, to the synthesis of two novel triketide lactones in good yield, in place of the two lactones produced by DEBS1-TE. Both of the novel products specifically lack a methyl group at C-4 of the lactone ring. CONCLUSIONS Although the AT domain is a core structural domain of a modular polyketide synthase, it has been swapped to generate a truly hybrid multienzyme with a rationally altered specificity of chain extension. Identical manipulations carried out on known polyketide antibiotics might therefore generate families of potentially useful analogues that are inaccessible by chemical synthesis. These results also encourage the belief that other domains may be similarly swapped.