The oleandomycin (OM) producer, Streptomyces antibioticus, possesses a mechanism involving two enzymes for the intracellular inactivation and extracellular reactivation of the antibiotic. Inactivation takes place by transfer of a glucose molecule from a donor (UDP-glucose) to OM, a process catalyzed by an intracellular glucosyltransferase. Glucosyltransferase activity is detectable in cell-free extracts concurrent with biosynthesis of OM. The enzyme has been purified 1,097-fold as a monomer, with a molecular mass of 57.1 kDa by a four-step procedure using three chromatographic columns. The reaction operates via a compulsory-order mechanism. This has been shown by steady-state kinetic studies using either OM or an alternative substrate (rosaramycin) and dead-end inhibitors, and isotopic exchange reactions at equilibrium. OM binds first to the enzyme, followed by UDP-glucose. A ternary complex is thus formed prior to transfer of glucose. UDP is then released, followed by the glycosylated oleandomycin (GS-OM).