A 34 kb fragment of the Nocardia lactamdurans DNA carrying the cluster of early cephamycin biosynthetic genes was cloned in lambda EMBL3 by hybridization with probes internal to the pcbAB and pcbC genes of Penicillium chrysogenum and Streptomyces griseus. The pcbAB and pcbC genes were found to be closely linked together in the genome of N. lactamdurans. The pcbAB gene of N. lactamdurans showed the same orientation as the pcbC gene, in contrast to the divergent expression of the genes in the pcbAB-pcbC cluster of P. chrysogenum and Acremonium chrysogenum. The pcbAB gene encodes a large (3649 amino acids) multidomain delta-(L-alpha-aminoadipyl)-L-cysteinyl-D-valine synthetase with a deduced Mr of 404,134. This enzyme contains three repeated domains and a consensus thioesterase active-site sequence. The pcbC gene encodes a protein of 328 amino acids with a deduced Mr of 37,469, which is similar to other isopenicillin N synthases except that it lacks one of two cysteine residues conserved in all other isopenicillin N synthases. The different organization of the pcbAB-pcbC gene cluster in N. lactamadurans and Streptomyces clavuligerus relative to P. chrysogenum and A. chrysogenum is intriguing in relation to the hypothesis of horizontal transference of these genes from actinomycetes to filamentous fungi by a single transfer event.