The tenS gene encoding tenellin synthetase (TENS), a 4239-residue polyketide synthase nonribosomal-peptide synthetase (PKS-NRPS) from Beauveria bassiana, was expressed in Aspergillus oryzae M-2-3. This led to the production of three new compounds, identified as acyl tetramic acids, and numerous minor metabolites. Consideration of the structures of these compounds indicates that the putative C-terminal thiolester reductase (R) domain does not act as a reductase, but appears to act as a Dieckmann cyclase (DKC). Expression of tenS in the absence of a trans-acting ER component encoded by orf3 led to errors in assembly of the polyketide component, giving clues to the mode of programming of highly reducing fungal PKS. Coexpression of tenS with orf3 from the linked gene cluster led to the production of a correctly elaborated polyketide. The NRPS adenylation domain possibly shows the first identified fungal signature sequences for tyrosine selectivity.