Naphthomycins (NATs) are 29-membered naphthalenic ansamacrolactam antibiotics with antimicrobial and antineoplastic activities. Their biosynthesis starts from 3-amino-5-hydroxy-benzoic acid (AHBA). By PCR amplification with primers for AHBA synthase and amino-dehydroquinate (aDHQ) synthase, a genomic region containing orthologs of these genes was identified in Streptomyces sp. CS. It was confirmed to be involved in naphthomycin biosynthesis by deletion of a large DNA fragment, resulting in abolishment of naphthomycin production. A 106 kb region was sequenced, and 32 complete ORFs were identified, including five polyketide synthase genes, eight genes for AHBA synthesis, and putative genes for modification, regulation, transport or resistance. Targeted inactivation and complementation experiments proved that the halogenase gene nat1 is responsible for the chlorination of C-30 of NATs. The nat1 mutant could also be complemented with asm12, the halogenase gene of ansamitocin biosynthesis. Likewise, an asm12 mutant could be complemented with nat1, suggesting a similar catalytic mechanism for both halogenases. A putative hydroxylase gene, nat2, was also inactivated, whereupon the biosynthesis of NATs was completely abolished with a tetraketide desacetyl-SY4b accumulated, indicating the participation of nat2 in the formation of the naphthalene ring. The information presented here expands our understanding of the biosynthesis of naphthalenic ansamycins, and may pave the way for engineering ansamacrolactams with improved pharmaceutical properties.