A monooxygenase encoded by the mtmOIV gene from the mithramycin gene cluster of Streptomyces argillaceus was purified 21-fold by a three-step purification procedure. This monooxygenase catalyzes the oxidative cleavage of the fourth ring of premithramycin B. The enzyme was dependent on NADPH and flavin adenine dinucleotide for activity with optimal pH at 9.5, and the K(m) values for NADPH and premithramycin B were 269.22 and 23.35 micro M, respectively. The reaction catalyzed by MtmOIV yields two possible isomers of the same basic shortened aliphatic chain molecule. One of the reaction products showed important biological activity, thus highlighting the importance of the cleavage of the fourth ring of the aglycon for biological activity.