The gene encoding the multifunctional enzyme enniatin synthetase from Fusarium scirpi (esyn1) was isolated and characterized by transcriptional mapping and expression studies in Escherichia coli. This is the first example of a gene encoding an N-methyl peptide synthetase. The nucleotide sequence revealed an open reading frame of 9393 bp encoding a protein of 3131 amino acids (M(r) 346,900). Two domains designated EA and EB within the protein were identified which share similarity to each other and to microbial peptide synthetase domains. In contrast to the N-terminal domain EA, the carboxyl terminal domain EB is interrupted by a 434-amino-acid portion which shows local similarity to a motif apparently conserved within adenine and cytosine RNA and DNA methyltransferases and therefore seems to harbour the N-methyl-transferase function of the multienzyme.