A cyclic undecapeptide-family natural product, cyclosporin A (CyA), which is one of the most valuable immunosuppressive drugs, is produced nonribosomally by a multifunctional cyclosporin synthetase enzyme complex in a filamentous fungal strain named Tolypocladium niveum. Previously, structural modifications of cyclosporins such as a region-specific hydroxylation at the 4(th) N-methyl leucine in a rare actinomycetes called Sebekia benihana were reported to lead to dramatic changes in their bioactive spectra. However, the reason behind this change could not be determined since a system to genetically manipulate S. benihana has not yet been developed. To address this limitation, in this study, we utilized the most commonly practiced gene manipulation techniques including conjugation-based foreign gene transfer-and-expression as well as targeted gene disruption to genetically manipulate S. benihana. Using these optimized genetic manipulation systems, a putative cytochrome P450 hydroxylase (CYP) gene named CYP506, which is involved in CyA hydroxylation in S. benihana, was specifically disrupted and genetically complemented. The S. benihana Delta CYP506 exhibited a significantly reduced CyA hydroxylation yield as well as considerable yield restoration by functional complementation of the S. benihana CYP506 gene, suggesting that the genetically manipulated S. benihana CYP mutant strains may serve as a more efficient bioconversion host for various valuable metabolites including CyA.