Determination of the nucleotide sequence downstream from the Lysobacter lactamgenus pcbC gene encoding isopenicillin N synthase revealed that five open-reading frames (ORF) including the pcbC gene were tightly linked in the same orientation. Each ORF has the remarkable feature of the protein-coding frame in the DNA sequence with a high G + C content. Expression in Escherichia coli and a comparison of the deduced amino acid sequences with published sequences showed that the gene cluster contained a deacetoxycephalosporin C synthetase (DAOCS) gene (cefE), an ORF having homology with the Cephalosporium acremonium Daocs/deacetylcephalosporin C synthetase gene (cefEF), an isopenicillin N epimerase gene(cefD), and a p-lactamase gene. The gene order was pcbC-cefE-ORF3-cefD-beta-lactamase.