In the presence of S-adenosyl-L-methionine, cell-free extracts of Streptomyces sp. C5, Streptomyces peucetius ATCC 29050, Streptomyces insignis ATCC 31913 and Streptomyces coeruleorubidus ATCC 31276 0-methylated carminomycin and 13-dihydrocarminomycin to daunomycin and 13-dihydrodaunomycin, respectively. With the corresponding aglycones, carminomycinone and 13-dihydrwarminomycinone, as substrates, no methylated products were detected. Other 4-hydroxyanthracyclines such as aklavin and aclacinomycin A, and 4-hydroxyanthracyclinones such as erhodomycinone and aklavinone, were not substrates for the 4-0-methyltransferase. These reaction specificities indicate that glycosylation of the anthracyclinone molecule must occur before 4-0-methylation, which means that 4-0-methylation of carminomycin is probably the terminal step in the biosynthesis of daunomycin, and that daunomycinone is not an intermediate in the pathway.