ECO-orf27 associated with the cluster of ECO-0501 (LW01) from Amycolatopsis orientalis is deduced to encode a type II thioesterase. Disruption of ECO-orf27 reduced LW01 production by 95 %. Complementation of the disrupted mutant with intact ECO-orf27 restored the production of LW01 suggesting that ECO-orf27 is crucial for LW01 biosynthesis. ECO-TE I, the gene encoding type I thioesterase from LW01 polyketide synthases, cannot complement ECO-orf27 deficient mutant distinguishing ECO-orf27 from type I thioesterase gene. Type II thioesterase gene pikAV from Streptomyces venezuelae could complement ECO-orf27 in A. orientalis indicating that the two genes are equivalent in their function. Overexpression of ECO-orf27 resulted in a 20 % increase in LW01 production providing an alternative approach for yield improvement.