During analysis of the recently identified gene cluster for the glycopeptide antibiotic balhimycin, produced by Amycolatopsis mediterranei DSM 5908, novel genes were identified and characterized in detail. The gene products of four of the identified genes (bpsA, bpsB, bpsC and bpsD) are nonribosomal peptide synthetases (NRPSs); one (Orf1-protein) shows similarities to small proteins associated with several NRPSs without an assigned function. BpsA and BpsB are composed of three modules each (modules 1-6), BpsC of one module (module 7) and BpsD of a minimal module (module 8). Thus, the balhimycin gene cluster encodes eight modules, whereas its biosynthetic product is a heptapeptide. Non-producing mutants were created by a gene disruption of bpsB, an in-frame deletion of bpsC and a gene replacement of bpsD. After establishment of a gene complementation system for Amycolatopsis strains, the replacement mutant of bpsD was complemented, demonstrating for the first time that BpsD, encoding the eighth module, is indeed involved in balhimycin biosynthesis. After feeding with beta-hydroxytyrosine the capability of the bpsD mutant to produce balhimycin was restored, demonstrating the participation of BpsD in the biosynthesis of this amino acid. The specificity of four of the eight adenylation domains was determined by ATP/PP(i) exchange assays: modules 4 and 5 activated L-4-hydroxyphenylglycine, module 6 activated beta-hydroxytyrosine and module 7 activated L-3,5-dihydroxyphenylglycine, which is in accordance with the sequence of the non-proteogenic amino acids 4 to 7 of the balhimycin backbone.