This two-step engineering approach will be described for the case of producing triacetic acid lactone (TAL) in E. coli. TAL is a signature byproduct of polyketide synthases (PKS) and a valuable synthetic precursor. An AraC variant that activates gene expression in response to TAL enabled in vivo directed evolution of Gerbera hybrida 2–pyrone synthase activity in E. coli. Two rounds of mutagenesis and high-throughput screening yielded a variant conferring ~18–fold increased TAL production, resulting in the highest reported TAL titer from microbial fermentation (4.0 g/L). The catalytic efficiency (kcat/Km) of the variant toward the substrate malonyl–CoA is improved ~13–fold. The TAL reporter can also find applications in other basic PKS activity screens. We continue to explore the range of small molecules accessible as effectors for the AraC system, and additional reporters developed from a large-scale screening operation will be described.