Oxygen deficiency is a critical factor during the fermentation production of natamycin. In order to alleviate oxygen limitation and enhance the yield of natamycin, the vgb gene, encoding Vitreoscilla hemoglobin (VHb) was inserted into pSET152 with its native promoter and integrated into the chromosome of Streptomyces gilvosporeus (S. gilvosporeus). The expression of VHb was determined by Western blotting. The activity of expressed VHb was confirmed by the observation of VHb-specific CO-difference spectrum with a maximal absorption at 419 nm for the recombinant. Integration of the empty plasmid pSET152 did not affect natamycin production of S. gilvosporeus. While the vgb-harboring strain exhibited high natamycin productivity, reaching 3.31 g/L in shake flasks and 8.24 g/L in 1-L fermenters. Compared to the wild strain, expression of VHb, increased the natamycin yield of the strain bearing vgb by 131.3 % (jar fermenter scale) and 175 % (shake flask scale), respectively, under certain oxygen-limiting condition. Addition of an extra copy of the vgb gene in S. gilvosporeus-vgb2 did not enhance the natamycin production obviously. These results provided a superior natamycin-producing strain which can be directly used in industry and a useful strategy for increasing yields of other metabolites in industrial strains.