Bleomycin (BLM) biosynthesis has been studied as a model for hybrid peptide-polyketide natural product biosynthesis. Cloning, sequencing, and biochemical characterization of the blm biosynthetic gene cluster from Streptomyces verticillus ATCC15003 revealed that (1) the BLM hybrid peptide-polyketide aglycon is assembled by the BLM megasynthetase that consists of both nonribosomal peptide synthetase (NRPS) and polyketide synthase (PKS) modules; (2) BlmIX/BlmVIII/BlmVII constitute a natural hybrid NRPS/PKS/NRPS system, serving as a model for both hybrid NRPS/PKS and PKS/NRPS systems; (3) the catalytic sites appear to be conserved in both hybrid NRPS/PKS and nonhybrid NRPS or PKS systems, with the exception of the KS domains in the hybrid NRPS/PKS systems that are unique; (4) specific interpolypeptide linkers may play a critical role in intermodular communication to facilitate the transfer of the growing intermediates between the interacting NRPS and/or PKS modules; (5) post-translational modification of the BLM megasynthetase has been accomplished by a single PPTase with broad carrier protein specificity; and (6) BlmIV/BlmIII-templated assembly of the BLM bithiazole moiety requires intriguing protein juxtaposition and modular recognition. These results lay the foundation to investigate the molecular basis for intermodular communication between NRPS and PKS in hybrid peptide-polyketide natural product biosynthesis and set the stage for engineering novel BLM analogues by genetic manipulation of genes governing BLM biosynthesis.