Pigments produced by Escherichia coli containing a cloned piece of DNA from Rhodococcus sp. ATCC 21145 were extracted in chloroform and separated into blue and pink components. Evidence from TLC, NMR spectroscopy, absorption spectrum analysis and solubility behaviour suggested that the blue pigment was indigo and the pink pigment was indirubin, a structural isomer of indigo. The proposed pathway for pigment production on LB agar involves the conversion of tryptophan to indole by tryptophanase of E. coli and the oxidation of indole to indigo by the product of the cloned Rhodococcus DNA insert.