An enzyme responsible for inactivating the peptidolactone antibiotic etamycin was partially purified from extracts of Streptomyces lividans. On-line liquid chromatography-electro spray mass spectrometry showed that the product of the enzyme-catalyzed reaction had a different retention time but the same mass as etamycin. Reaction of etamycin in 1.0 M NaOH gave a mixture consisting of the product expected from hydrolysis of the lactone bond and a product corresponding to that from the enzyme reaction, Label from (H2O)-O-18 was incorporated into the hydrolysis product but not into the product of the enzyme reaction, An enzyme-catalyzed elimination reaction is proposed, and is supported by evidence for the structure of the resulting dehydrobutyrine peptide from combined liquid chromatography-tandem mass spectrometry (LC-MS-MS) and H-1 NMR spectroscopy.