Industrial penicillin production with the filamentous fungus Penicillium chrysogenum is based on an unprecedented effort in microbial strain improvement. To gain more insight into penicillin synthesis, we sequenced the 32.19 Mb genome of P. chrysogenum Wisconsin54-1255 and identified numerous genes responsible for key steps in penicillin production. DNA microarrays were used to compare the transcriptomes of the sequenced strain and a penicillinG high-producing strain, grown in the presence and absence of the side-chain precursor phenylacetic acid. Transcription of genes involved in biosynthesis of valine, cysteine and alpha-aminoadipic acid -precursors for penicillin biosynthesis-as well as of genes encoding microbody proteins, was increased in the high-producing strain. Some gene products were shown to be directly controlling beta-lactam output. Many key cellular transport processes involving penicillins and intermediates remain to be characterized at the molecular level. Genes predicted to encode transporters were strongly overrepresented among the genes transcriptionally upregulated under conditions that stimulate penicillinG production, illustrating potential for future genomics-driven metabolic engineering.