A new mechanism of polyketide assembly has emerged in bacteria for the biosynthesis of small aromatic residues that serve as important structural elements in a growing number of biologically active natural products. These small aromatic polyketides are synthesized by homodimeric (type III) polyketide synthases (PKSs) that are phylogenetically and biochemically related to ubiquitous plant PKSs such as chalcone synthase. Thus far, type III PKSs have been shown to be responsible for the biosynthesis of natural products such as 1,3,6,8- tetrahydroxynaphthalene (THN) and the formation of key components of more complex antimicrobial and antitumor natural products such as vancomycin, naphterpin, marinone, and kendomycin. While type III PKSs are architecturally simple, they arguably represent the most sophisticated PKSs mechanistically since embodied within their homodimeric architecture is the catalytic machinery necessary for starter molecule recognition and loading, malonyl- CoA decarboxylation and polyketide chain extension, and ultimately, multiple pathways for termination. Their simple gene and protein architecture makes them amendable for study using a variety of sophisticated approaches including heterologous biosynthesis, in vitro and in vivo biochemical analysis, directed and random approaches towards enzyme engineering, and atomic resolution protein x-ray crystallography. Although the analysis of related plant enzymes is fairly mature, research on the bacterial counterparts is only beginning and can be expected to yield novel, interesting, and potentially important information on these simple condensing enzymes. Moreover, the mechanistic and structural understanding of bacterial type III PKSs is likely to be relevant for the productive reengineering of modular type I and iterative type II bacterial PKSs. With the high resolution three-dimensional crystal structure of the first bacterial PKS, THN synthase from Streptomyces coelicolor A3(2), nearly in hand, the stage is set for a comprehensive structural and mechanistic analysis of this new subclass of bacterial PKS. Studies will extend to other bacterial type III PKSs, including those involved in the biosynthesis of the clinically important glycopeptide vancomycin, the broad spectrum antibiotic 2,4- diacetylphloroglucinol, and the antitumor antibiotic marinone.