[Objective] Toyocamycin is an important nucleoside antibiotics with diverse bioactivities and potentials for biological control of plant diseases. We expressed the vgb gene encoding Vitreoscilla hemoglobin to alleviate the dissolved oxygen (DO) limitation and to improve the toyocamycin production in Streptomyces diastatochromogenes 1628. [Methods] we used gfp gene as the report gene to test the transcription activity of erythromycin resistance gene promoter PermE* of integrative plasmid pIB139. Then, the promoter PermE* was used to drive the gene vgb expression in S. diastatochromogenes 1628. [Results] Green fluorescent of recombinant strain 1628-GFP was detected by fluorescent microscopy. The promoter PermE* was efficient for heterologous gene expression in S. diastatochromogenes 1628. The vgb gene was also expressed in engineered strain 1628-VHB by the CO-difference spectrum analysis. The engineered strain 1628-VHB improved toyocamycin production under all diverse DO condition. Specially, strain 1628-VHB increased 48.9% toyocamycin production under middle and 104.5% under high limitation DO condition, comparing with the control stain 1628. Meanwhile, strain 1628-VHB was genetically stable by the PCR and toyocamycin yield test from different generation strain. [Conclusion] Expression of vgb gene improved toyocamycin production of strain 1628.