Two new diketopiperazine dipeptides, cyclomarazines A and B, were isolated and characterized along with the new cyclic heptapeptide cyclomarin D from the marine bacterium Salinispora arenicola CNS-205. These structurally related cyclic peptides each contain modified amino acid residues, including derivatives of N-(1,1-dimethylallyl)-tryptophan and delta-hydroxyleucine, which are common in the di- and heptapeptide series. Stable isotope incorporation studies in Streptomyces sp. CNB-982, which was first reported to produce the cyclomarin anti-inflammatory agents, illuminated the biosynthetic building blocks associated with the major metabolite cyclomarin A, signifying that this marine microbial peptide is nonribosomally derived largely from nonproteinogenic amino acid residues. DNA sequence analysis of the 5.8 Mb S. arenicola circular genome and PCR-targeted gene inactivation experiments identified the 47 kb cyclomarin/cyclomarazine biosynthetic gene cluster (cym) harboring 23 open reading frames. The cym locus is dominated by the 23 358 bp cymA, which encodes a 7-module nonribosomal peptide synthetase (NRPS) responsible for assembly of the full-length cyclomarin heptapeptides as well as the truncated cyclomarazine dipeptides. The unprecedented biosynthetic feature of the megasynthetase CymA to synthesize differently sized peptides in vivo may be triggered by the level of beta oxidation of the priming tryptophan residue, which is oxidized in the cyclomarin series and unoxidized in the cyclomarazines. Biosynthesis of the N-(1,1-dimethyl-2,3-epoxypropyl)-beta-hydroxytryptophan residue of cyclomarin A was further illuminated through gene inactivation experiments, which suggest that the tryptophan residue is reverse prenylated by CymD prior to release of the cyclic peptide from the CymA megasynthetase, whereas the cytochrome P450 CymV installs the epoxide group on the isoprene of cyclomarin C post-NRPS assembly. Last, the novel amino acid residue 2-amino-3,5-dimethylhex-4-enoic acid in the cyclomarin series was shown by bioinformatics and stable isotope experiments to derive from a new pathway involving condensation of isobutyraldehyde and pyruvate followed by S-adenosylmethionine methylation. Assembly of this unsaturated, branched amino acid is unexpectedly related to the degradation of the environmental pollutant 3-(3-hydroxyphenyl)propionic acid.