Sequence analysis of the metabolically rich genome of Streptomyces peucetius ATCC 27952 revealed a 2,199 bp sesquiterpene alcohol (germacradienol) synthase-encoding gene from the germacradienol synthase/terpene cyclase gene cluster. The gene was named spterp13, and its putative function is as a germacradienol synthase/terpene cyclase. The amino acid sequence of Spterp13 shows 66% identity with SAV2163 (GeoA) from S. avermitilis MA4680 and 65% identity with SCO6073 from S. coelicolor A3(2), which produces germacradienol/geosmin. The full-length recombinant protein was heterologously expressed as a his-tagged fusion protein in Escherichia coli, purified, and shown to catalyze the $Mg^{2+}$-dependent conversion of farnesyl diphosphate to the germacradienol, which was verified by gas chromatography/mass spectrometry.