The beta-lactamase inhibitor clavulanic acid is formed by condensation of a pyruvate-derived C3 unit with a molecule of arginine. A gene (pyc, for pyruvate converting) located upstream of the bls gene in the clavulanic acid gene cluster of Streptomyces clavuligerus encodes a 582-amino-acid protein with domains recognizing pyruvate and thiamine pyrophosphate that shows 29.9% identity to acetohydroxyacid synthases. Amplification of the pyc gene resulted in an earlier onset and higher production of clavulanic acid. Replacement of the pyc gene with the aph gene did not cause isoleucine-valine auxotrophy in the mutant. The pyc replacement mutant did not produce clavulanic acid in starch-asparagine (SA) or in Trypticase soy broth (TSB) complex medium, suggesting that the pyc gene product is involved in the conversion of pyruvate into the C3 unit of clavulanic acid. However, the beta-lactamase inhibitor was still formed at the same level as in the wild-type strain in defined medium containing D-glycerol, glutamic acid, and proline (GSPG medium) as confirmed by high-pressure liquid chromatography and paper chromatography. The production of clavulanic acid by the replacement mutant was dependent on addition of glycerol to the medium, and glycerol-free GSPG medium did not support clavulanic acid biosynthesis, suggesting that an alternative gene product catalyzes the incorporation of glycerol into clavulanic acid in the absence of the Pyc protein. The pyc replacement mutant overproduces cephamycin.