Streptomyces clavuligerus, an industrially important producer of clavulanate as well as cephem antibiotics, also produces the N-acylated dithiolopyrrolone antibiotic holomycin, a reported inhibitor of RNA synthesis. The genome sequence of S. clavuligerus ATCC 27064 was examined for a potential biosynthetic gene cluster, assuming that holomycin arises from some derivative of an L-Cys-L-Cys dipeptide that has undergone eight-electron oxidation, fused five-five ring formation, and decarboxylation. ORFs 3483-3492 comprise a candidate cluster, with a predicted acyltransferase, a stand-alone nonribosomal peptide synthetase (NRPS) module, and four flavin-dependent oxidoreductases. Deletions of ORF3488, the NRPS module, and ORF3489, a phosphopantothenoylcysteine decarboxylase homolog, abolished holomycin production both in wild type and in a holomycin-overproducing mutant. Heterologous expression and purification of ORF3488 allowed demonstration of L-Cys-AMP formation and subsequent covalent tethering of Cys to the phosphopantetheinyl arm of the thiolation domain of this NRPS protein. Purified ORF3483 shows acyltransferase activity, converting holothin to holomycin and longer acylated homologs as the last step in antibiotic assembly.