Peptide-synthetase-encoding DNA fragments were isolated by a PCR-based approach from the chromosome of Microcystis aeruginosa K-139, which produces cyclic heptapeptides, 7-desmethylmicrocystin-LR and 3, 7-didesmethylmicrocystin-LR. Three open reading frames (mcyA, mcyB, mcyC) encoding m_-icrocy_-stin synthetases were identified in the gene cluster. Sequence analysis indicated that McyA (315 kDa) consists of two modules with an N-methylation domain attached to the first and an epimerization domain attached to the second; Mcyll (242 kDa) has two modules, and McyC (147 kDa) contains one module with a putative C-terminal thioesterase domain. Conserved amino acid sequence motifs for ATP binding, ATP hydrolysis, adenylate formation, and 4'-phosphopantetheine attachment were identified by sequence comparison with authentic peptide synthetase. Insertion mutations in mcyA, generated by homologous recombination, abolished the production of both microcystins in M. aeruginosa K-139. Primer extension analysis demonstrated lightdependent mcy expression. Southern hybridization and partial DNA sequencing analyses of six microcystin-producing and two non-producing Microcystis strains suggested that the microcystin-producing strains contain the mcy gene and the non-producing strains can be divided into two groups, those possessing no mcy genes and those with mcy genes.