Calcimycin is a rare divalent cation specific ionophore antibiotic that has many biochemical and pharmaceutical applications. We have recently cloned and sequenced the Streptomyces chartreusis calcimycin biosynthesis gene cluster as well as identified the genes required for the synthesis of the polyketide backbone of calcimycin. Additional modifying or decorating enzymes are required to convert the polyketide backbone into the biologically active calcimycin. Using targeted mutagenesis of Streptomyces we were able to show that calM from the calcimycin biosynthesis gene cluster is required for calcimycin production. Inactivating calM by PCR targeting, caused high level accumulation of N-demethyl calcimycin. CalM in the presence of S-adenosyl-L-methionine converted N-demethyl calcimycin to calcimycin in vitro. The enzyme was determined to have a kinetic parameter of Km 276 μM, kcat 1.26 min(-1) and kcat/Km 76.2 M(-1) s(-1). These results proved that CalM is a N-methyltransferase that is required for calcimycin biosynthesis, and they set the stage for generating much desired novel calcimycin derivatives by rational genetic and chemical engineering.