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The recent development of molecular cloning systems in Streptomyces^1–4 has made possible the isolation of biosynthetic genes for some of the many antibiotics produced by members of this important genus of bacteria^5–10. Such clones can now be used to test the idea that novel antibiotics could arise through the transfer of biosynthetic genes between streptomycetes producing different antibiotics¹¹. The likelihood of a ‘hybrid’ compound being produced must depend on the substrate specificities of the biosynthetic enzymes, about which little is known. In attempts to demonstrate hybrid antibiotic production, we therefore began with strains producing different members of the same chemical class of compounds in order to maximize the chance of success. Here we report the production of novel compounds by gene transfer between strains producing the isochromanequinone antibiotics actinorhodin¹², granaticin¹³ …