Streptomyces venezuelae synthesizes chloramphenicol (Cm), an inhibitor of ribosomal peptidyl transferase activity, thereby inhibiting bacterial growth. The producer escapes autoinhibition by its own secondary metabolite through phosphorylation of Cm by chloramphenicol phosphotransferase (CPT). In addition to active site binding, CPT binds its product 3-phosphoryl-Cm, in an alternate product binding site. To address the mechanisms of Cm tolerance of the producer, the crystal structures of CPT were determined in complex with either the nonchlorinated Cm (2-N-Ac-Cm) at 3.1 A resolution or the antibiotic's immediate precursor, the p-amino analog p-NH(2)-Cm, at 2.9 A resolution. Surprisingly, p-NH(2)-Cm binds CPT in a novel fashion. Additionally, neither 2-N-Ac-Cm nor p-NH(2)-Cm binds to the secondary product binding site.