Streptomyces diastatochromogenes 1628, capable of producing toyocamycin (TM), has exhibited a potential biocontrol effect in inhibiting the development of phytopathogens in the agriculture field. In this study, an efficient transformation system was developed using the intergeneric conjugation. This was achieved by optimization of experimental parameters. Under optimal conditions, a maximal conjugation frequency of 4.1 x 10(-4) per recipient was obtained. In order to heterologously express the gene vgb encoding Vitreoscilla hemoglobin in S. diastatochromogenes 1628, we placed vgb under the control of the constitutive promoter PermE(*) and constructed plasmid pIB139-vgb. This plasmid was integrated into the chromosome of S. diastatochromogenes 1628 using intergeneric conjugation established above. Finally, strain 1628-VHB-23 with the highest TM production was screened. Results indicated that expression of vgb gene had always significantly promoted the cell growth and TM production in S. diastatochromogenes 1628 under different dissolved oxygen conditions. In particular, under the limited aerobic condition, strain 1628-VHB-23 obtained 33.3 % more DCW and produced 210 % more TM in 7-l fermentor as compared with the wild-type strain.