Chromomycin A3 is a member of the aureolic acid group family of antitumour drugs. Three tailoring modification steps occur during its biosynthesis affecting the sugar moieties: two O-acetylations and one O-methylation. The 4-O-methylation in the 4-O-methyl-D-oliose moiety of the disaccharide chain is catalysed by the cmmMIII gene product. Inactivation of this gene generated a chromomycin-non-producing mutant that accumulated three unmethylated derivatives containing all sugars but differing in the acylation pattern. Two of these compounds were shown to be substrates of the methyltransferase as determined by their bioconversion into chromomycin A2 and A3 after feeding these compounds to a Streptomyces albus strain expressing the cmmMIII gene. The same single membrane-bound enzyme, encoded by the cmmA gene, is responsible for both acetyl transfer reactions, which convert a relatively inactive compound into the bioactive chromomycin A3. Insertional inactivation of this gene resulted in a mutant accumulating a dideacetylated chromomycin A3 derivative. This compound, lacking both acetyl groups, was converted in a two-step reaction via the 4E-monoacetylated intermediate into chromomycin A3 when fed to cultures of S. albus expressing the cmmA gene. This acetylation step would occur as the last step in chromomycin biosynthesis, being a very important event for self-protection of the producing organism. It would convert a molecule with low biological activity into an active one, in a reaction catalysed by an enzyme that is predicted to be located in the cell membrane.