The biosynthesis of fungal highly reduced polyketides was investigated by domainain shuffling, heterologous expression and gene mactivation expenments. In order to produce novel polyketides and to study chain length control of fungal iterative type I PKS, the ketosynthase (KS) and acyltransferase (AT) domains of squalestatin tetraketide synthase (SQTKS) were replaced by the corresponding domains from tenellin 1 and fusarin C synthetases that catalyse the synthesis of a pentaketide and a hexaketide, respectively. However, the expression of the chimeric genes encoding the hybrid PKS enzymes in Aspergillus oryzae did not result in production of any polyketides in detectable amount.