In glycopeptide-resistant enterococci and staphylococci, high-level resistance is achieved by replacing the C-terminal d-alanyl-d-alanine of lipid II with d-alanyl-d-lactate, thus reducing glycopeptide affinity for cell wall targets. Reorganization of the cell wall in these organisms is directed by the vanHAX gene cluster. Similar self-resistance mechanisms have been reported for glycopeptide-producing actinomycetes. We investigated glycopeptide resistance in Nonomuraea sp. ATCC 39727, the producer of the glycopeptide A40926, which is the precursor of the semisynthetic antibiotic dalbavancin, which is currently in phase III clinical trials. The MIC of Nonomuraea sp. ATCC 39727 toward A40926 during vegetative growth was 4 microg/ml, but this increased to ca. 20 microg/ml during A40926 production. vanHAX gene clusters were not detected in Nonomuraea sp. ATCC 39727 by Southern hybridization or by PCR with degenerate primers. However, the dbv gene cluster for A40926 production contains a gene, vanY (ORF7), potentially encoding an enzyme capable of removing the terminal d-Ala residue of pentapeptide peptidoglycan precursors. Analysis of UDP-linked peptidoglycan precursors in Nonomuraea sp. ATCC 39727 revealed the predominant presence of the tetrapeptide UDP-MurNAc-l-Ala-d-Glu-meso-Dap-d-Ala and only traces of the pentapeptide UDP-MurNAc-l-Ala-d-Glu-meso-Dap-d-Ala-d-Ala. This suggested a novel mechanism of glycopeptide resistance in Nonomuraea sp. ATCC 39727 that was based on the d,d-carboxypeptidase activity of vanY. Consistent with this, a vanY-null mutant of Nonomuraea sp. ATCC 39727 demonstrated a reduced level of glycopeptide resistance, without affecting A40926 productivity. Heterologous expression of vanY in a sensitive Streptomyces species, Streptomyces venezuelae, resulted in higher levels of glycopeptide resistance.