Protein Domain Fold Similarity and Natural Product Structure as Guiding Principles for Compound Library Design -- Sources of Polyketides and Non-Ribosomal Peptides -- Polyketide Synthases: Mechanisms and Models -- Functional and Structural Basis for Targeted Modification of Non-Ribosomal Peptlde Synthetases -- Prerequisites for Combinatorial Biosynthesis: Evolution of Hybrid NRPS/PKS Gene Clusters -- Engineering Glycosylation in Bioactive Compounds by Combinatorial Biosynthesis -- Glycosyltransferases and Other Tailoring Enzymes as Tools for the Generation of Novel Compounds -- Enzymatic Incorporation of Halogen Atoms into Natural Compounds -- From Glucose to Antibiotics: What Controls the Fluxes? -- Precursor-Directed Biosynthesis for the Generation of Novel Glycopetides -- Tool-Box: Tailoring Enzymes for Bio-Combinatorial Lead Development and as Markers for Genome-Based Natural Product Lead Discovery -- Natural Product Biosynthetic Assembly Lines: Prospects and Challenges for Reprogramming. Genome- and proteome-based research is generating a significant increase in the number of available drug targets. Correspondingly there is an increasing need for novel, diverse compounds, particularly based on natural compounds, as screening resource. The purpose of the Ernst Schering Research Foundation Workshop 51 was to provide a forum for an open exchange on perspectives and limitations of biocombinatorial synthesis and the significance of this technology for future drug discovery in light of this challenge. Experts from academia and industry provided contributions covering: the significance of natural compounds for state-of-the-art drug discovery; the underlying basic principle for the biosynthesis of highly complex compounds; and the scope and limitations of combinatorial biosynthesis regarding formation, identification, optimisation, isolation and manufacturing of novel biologically active entities.