Halstoctacoanolides A and B are 28-membered polyketide macrolactones and were isolated from Streptomyces halstedii HC34. The biosynthetic gene cluster (hls cluster) of halstoctacosanolides was completely identified from the genome library of Streptomyces halstedii HC34. DNA sequence analysis of ca. 100 kb region revealed that there were seven type I polyketide synthases (PKSs) and two cytochrome P450 monooxygenases in this cluster. Involvement of the gene cluster in the halstoctacosanolide biosynthesis was demonstrated by the gene disruption of P450 monooxygenase genes. The mutants produced a new deoxygenated halstoctacosanolide derivative, halstoctacosanolide C, which confirmed that the hls gene cluster was essential for the biosynthesis of halstoctacosanolides.