Polymyxins are cationic lipopeptide antibiotics active against many species of Gram-negative bacteria. We sequenced the gene cluster for polymyxin biosynthesis from Paenibacillus polymyxa PKB1. The 40.8 kb gene cluster comprises three nonribosomal peptide synthetase-encoding genes and two ABC transporter-like genes. Disruption of a peptide synthetase gene abolished all antibiotic production, whereas deletion of one or both transporter genes only reduced antibiotic production. Computational analysis of the peptide synthetase modules suggested that the enzyme system produces variant forms of polymyxin B (1 and 2), with D-2,4-diaminobutyrate instead of L-2,4-diaminobutyrate in amino acid position 3. Two antibacterial metabolites were resolved by HPLC and identified by high-resolution mass spectrometry and MS/MS sequencing as the expected variants 3 and 4 of polymyxin B(1) (1) and B(2) (2). Stereochemical analysis confirmed the presence of both D-2,4-diaminobutyrate and L-2,4-diaminobutyrate residues.