An enzyme fraction, isolated from crude extracts of the fungus Tolypocladium inflatum, strain 7939/F, is able to synthesize the undecapeptide cyclosporin A. The formation of cyclosporin A was monitored by incorporation of the radiolabeled constituent amino acids of cyclosporin A or by using S-adenosyl-L-[14C-methyl] methionine. The structure of cyclosporin A, synthesized enzymatically in vitro, was confirmed by chromatographic comparison with the authentic compound and by amino acid analyses. Replacement of L-2-aminobutyric acid in the reaction mixture by L-alanine, L-threonine, L-valine, or L-norvaline yields the naturally occurring cyclosporins B, C, D, and G. Also, D-alanine could be replaced by D-serine to yield [D-Ser8]cyclosporin A.