From Streptomyces virginiae, in which production of streptogramin antibiotic virginiamycin M(1) and S is tightly regulated by a low-molecular-weight Streptomyces hormone called virginiae butanolide (VB), which is a member of the gamma-butyrolactone autoregulators, the hormone biosynthetic gene (barS1) was cloned and characterized by heterologous expression in Escherichia coli and by gene disruption in S. virginiae. The barS1 gene (a 774-bp open reading frame encoding a 257-amino-acid protein [M(r), 27,095]) is situated in the 10-kb regulator island surrounding the VB-specific receptor gene, barA. The deduced BarS1 protein is weakly homologous to beta-ketoacyl-acyl carrier protein/coenzyme A reductase and belongs to the superfamily of short-chain alcohol dehydrogenase. The function of the BarS1 protein in VB biosynthesis was confirmed by BarS1-dependent in vitro conversion of 6-dehydro-VB-A to VB-A, the last catalytic step in VB biosynthesis. Of the four possible enantiomeric products from racemic 6-dehydro-VB-A as a substrate, only the natural enantiomer of (2R,3R,6S)-VB-A was produced by the purified recombinant BarS1 (rBarS1), indicating that rBarS1 is the stereospecific reductase recognizing (3R)-isomer as a substrate and reducing it stereospecifically to the (6S) product. In the DeltabarS1 mutant created by homologous recombination, the production of VB as well as the production of virginiamycin was lost. The production of virginiamycin by the DeltabarS1 mutant was fully recovered by the external addition of VB to the culture, which indicates that the barS1 gene is essential in the biosynthesis of the autoregulator VBs in S. virginiae and that the failure of virginiamycin production was a result of the loss of VB production.