Tautomycetin (TMC), produced by Streptomyces sp. CK4412, is an antifungal secondary metabolite with an unusual ester bond linkage between a terminal cyclic anhydride moiety and a linear polyketide chain bearing an unusual terminal alkene. Recently, TMC was identified to possess additional biological functions including T cell-specific immunosuppressive and anti-cancer activities through differential inhibition of protein phosphatases, such as PP1, PP2A, and SHP2. These findings led us to isolate and characterize its entire biosynthetic and regulatory pathway gene cluster. In silico database comparisons revealed that the deduced products of two translationally coupled genes, a 666-bp tmcJ and a 1458-bp tmcK located on the 3'-terminus of the polyketide synthase gene, were found to have amino acid sequence homologies with putative bacterial decarboxylase genes. Targeted gene disruption of tmcK, but not tmcJ, from the Streptomyces sp. CK4412 chromosome resulted in production of a 5-deoxy-3 ''-carboxylic TMC. The tmcK mutant strain was functionally complemented using an integrative plasmid carrying tmcK and/or tmcJ-tmcK in order to restore TMC biosynthesis, a result suggesting that only TmcK is a functional TMC terminal decarboxylase. Unlike an authentic TMC, this engineered 5-deoxy-3 ''-carboxylic TMC analogue failed to show PP1 selectivity over PP2A, and it showed significantly reduced cytotoxicity against a human lung cancer cell line. These results imply that regio-specific modifications of TMC polyketide moiety, such as C3 ''-terminal carboxylation and/or C5-deketonization, could differentiate multiple biological activities in TMC produced from Streptomyces sp. CK4412. (C) 2012 Elsevier Ltd. All rights reserved.