Streptomyces griseus DSM 2608 produces bafilomycin, an antifungal plecomacrolide antibiotic. We cloned and sequenced an 87.4-kb region, including a polyketide synthase (PKS) region, methoxymalonate genes, flavensomycinate genes, and other putative regulatory genes. The 58.5kb of PKS region consisting 12 PKS modules arranged in five different PKS genes, was assumed to be responsible for the biosynthesis of plecomacrolide backbone including 16-membered macrocyclic lactone. All the modules showed high similarities with typical type I PKS genes. However, the starting module of PKS gene was confirmed to be specific for isobutyrate by sequence comparison of an acyltransferase domain. In downstream of PKS region, the genes for methoxymalonate biosynthesis were located, among which a gene for FkbH-like protein was assumed to play an important role in the production of methoxymalonyl-CoA from glyceryl-CoA. Further the genes encoding flavensomycinyl-ACP biosynthesis for the post-PKS tailoring were also found in the upstream of PKS region. By gene disruption experiments of a dehydratase domain of module 12 and an FkbH-like protein, this gene cluster was confirmed to be involved in the biosynthesis of bafilomycin.