Modular polyketide synthases are large, multifunctional enzyme complexes that are involved in the biosynthesis of important polyketides. Recent studies have revolutionized our understanding of the linear organization of polyketide-synthase-gene clusters. They have provided crucial information on the initiation, elongation and termination of polyketide chains, and thus a rational basis for the generation of novel compounds. Combinatorial libraries have helped this field to move from a random approach to a more empirical phase. The large number of diverse analogs of antibiotics that are presently produced demonstrate the enormous potential of combinatorial biosynthesis.