The production of antibiotics by soil-borne micro-organisms, the actinomycetes, has considerable economic importance. The manipulation of antibiotic producers has become a prime target for the application of recombinant DNA technology. Certain technical requirements have had to be met for gene cloning to be successful in the actinomycetes. These requirements, including the development of cloning vectors and transformation procedures, have been satisfied, in part, for some members of the Streptomyces genus. Some problems including sequence rearrangement and stability of plasmid maintenance are now being recognized. A number of genes have been cloned in Streptomyces and some preliminary results characterizing the gene for a Streptomyces-derived beta-galactosidase-like activity were described.