A 7.0-kb DNA fragment that conferred redbrown pigment production on Streptomyces griseus was shotgun-cloned with a multicopy vector pIJ486 from this microorganism. By restriction endonuclease mapping and subcloning, a 1.5-kb fragment which is essential for the production of redbrown pigment was determined. The nucleotide sequence of this region revealed the presence of two open reading frames, ORF1 with 109 amino acids (named RppA) and ORF2 with 262 amino acids (RppB), in addition to a truncated ORF3. The termination codon of rppA and the initiation codon of rppB overlapped, sharing one common nucleotide, which strongly suggests that these two genes are cotranscribed. Both rppA and rppB were essentially required for the pigmentation. The RppB protein showed great similarity in amino acid sequence to a chalcone synthase, a key enzyme of central importance in the biosynthetic pathway of all classes of flavonoids in plants. Part of RppA showed sequence similarity to the 33kDa phosphoprotein of adenovirus. Nucleotide sequences homologous to rppA and rppB were widely distributed in Streptomyces species, as determined by Southern hybridization. Further nucleotide sequencing of the entire orf-3 gene showed that ORF3 with 403 amino acids was a cytochrome P-450 (named P-450_RPP). These data suggested that the cloned fragment contained part of a gene cluster for the biosynthesis of a certain metabolite. Introduction of the subcloned 1.5-kb fragment into Streptomyces lividans as well as Escherichia coli also caused production of redbrown pigment, suggesting that RppA and RppB are capable of synthesizing the redbrown pigment from metabolites commonly present in bacteria.