Plasmid pJV4, containing a 2.4-kilobase pair insert of genomic DNA from the chloramphenicol (Cm) producer Streptomyces venezuelae ISP5230, confers resistance when introduced by transformation into the Cm-sensitive host Streptomyces lividans M252 (Mosher, R. H. Ranade, N. P., Schrempf, H., and Vining, L. C. (1990) J. Gen. Microbiol. 136, 293-301). Transformants rapidly metabolized Cm to one major product, which was isolated and purified by reversed phase chromatography. The metabolite was identified by nuclear magnetic resonance spectroscopy and mass spectrometry as 3'-O-phospho-Cm, and was shown to have negligible inhibitory activity against Cm-sensitive Micrococcus luteus. The nucleotide sequence of the S. venezuelae DNA insert in pJV4 contains an open reading frame (ORF) that encodes a polypeptide (19 kDa) with a consensus motif at its NH2 terminus corresponding to a nucleotide-binding amino acid sequence (motif A or P-loop; Walker, J. E., Saraste, M., Runswick, M. J., and Gay, N. J. (1982) EMBO J. 1, 945-951). When a recombinant vector containing this ORF as a 1.6-kilobase pair SmaI-SmaI fragment was used to transform S. lividans M252, uniformly Cm-resistant transformants were obtained. A strain of S. lividans transformed by a vector in which the ORF had been disrupted by an internal deletion yielded clones that were unable to phosphorylate Cm, and exhibited normal susceptibility to the antibiotic. The results implicate the product of the ORF from S. venezuelae as an enzymic effector of Cm resistance in the producing organism by 3'-O-phosphorylation. We suggest the trivial name chloramphenicol 3'-O-phosphotransferase for the enzyme.