The ddcA gene from Streptomyces fradiae, which is located adjacent to the left edge of the tylosin biosynthetic cluster, has been cloned and sequenced. DNA sequence analysis revealed an ORF of 1194 bp that encodes a product of 42.6 kDa. This protein showed significant similarity to the extracellular endopeptidase with beta-lactamase activity encoded by the adp gene from Bacillus cereus and to PBPs (DD-carboxypeptidases and DD-endopeptidases) and beta-lactamases. Moreover, it contains three characteristic motifs conserved in PBPs and beta-lactamases, including an essential serine residue in the active centre and a putative leader peptide. Heterologous expression of the ddcA gene in Streptomyces lividans demonstrated the presence in the transformants of an extracellular beta-lactamase active against penicillin G, ampicillin and the chromogenic cephalosporin nitrocefin.