The drug's main component artemisinin is found in the sweet wormwood plant, Artemisia annua, but extracting it is costly and time consuming.
The World Health Organization recommends using artemisinin-based drugs to treat malaria, but with 300-500 million people being infected each year, suppliers are unable to meet the demand.
Now researchers have created yeast 'factories' that can make the chemical precursor of artemisinin nearly 100 times as fast as it can be extracted from plants.
The team, led by Jay Keasling of the University of California at Berkeley in the United States, did this by tweaking the yeast's genes then adding two genes from sweet wormwood to its DNA.
A "simple and inexpensive purification process" is all that is needed to extract artemisinin from the modified yeast, say the researchers.
They say their method is more reliable than plant-based methods because it is not subject to factors that such as the weather. It is also cheaper and produces a purer form of artemisinin than can be extracted from sweet wormwood.
They add, however, that more work is needed to optimise the amount of artemisinin produced.
Leann Tilley, professor of biochemistry at La Trobe University in Australia, says the work is "of major importance and very exciting."
But she adds that it is critical that the costs of the extraction and manufacturing processes are kept as low as possible to make the drug affordable to the people who need it.
Link to full paper in Nature
Reference: Nature 440, 940 (2006)