The early steps in the biosynthesis of the aromatic polyketide actinorhodin (1) are catalyzed by six gene products : the minimal polyketide synthase (PKS) (consisting of a ketosynthase, chain length determining protein, and acyl carrier protein), a ketoreductase (KR), and two additional proteins encoded by the actVII and actIV genes whose functions have not been perfectly understood. By comparing the structures of polyketides produced by a series of recombinants carrying various combinations of the six genes, the functions of the proteins encoded by actVII and actIV have been elucidated. Two novel polyketides, SEK34 (4) and SEK34b (5), were produced by a recombinant strain expressing the act minimal PKS, act KR, and actVII genes (but lacking actIV). The structures of these molecules, together with those of previously isolated polyketides from other act PKS enzyme combinations, suggest that the protein encoded by actVII functions as an aromatase responsible for catalyzing two dehydrations of the first carbocyclic ring, whereas the protein encoded by actIV is a cyclase that catalyzes an intramolecular aldol condensation to form the second ring. These results may be extrapolated to related aromatic PKSs to provide a conceptual framework for the rational design and engineered biosynthesis of novel polyketides by manipulating the early aromatization and cyclization steps, in addition to the chain assembly and ketoreduction steps already described.