The 18-membered polyketide macrolide borrelidin exhibits a number of important biological activities, including potent angiogenesis inhibition. This has prompted two recent total syntheses as well as the cloning of the biosynthetic gene cluster from Streptomyces parvulus Tü4055. Borrelidin possesses some unusual structural characteristics, including a cyclopentane carboxylic acid moiety at C17 and a nitrile moiety at C12 of the macrocyclic ring. Nitrile groups are relatively rare in nature, and little is known of their biosynthesis during secondary metabolism. The nitrile group of borrelidin is shown here to arise from the methyl group of a methylmalonyl-CoA extender unit incorporated during polyketide chain extension. Insertional inactivation of two genes in the borrelidin gene cluster, borI (coding for a cytochrome P450 monooxygenase) and borJ (coding for an aminotransferase), generated borrelidin non-producing mutants. These mutants accumulated different compounds lacking the C12 nitrile moiety, with the product of the borI-minus mutant (12-desnitrile-12-methyl-borrelidin) possessing a methyl group and that of the borJ-minus mutant (12-desnitrile-12-carboxyl-borrelidin) a carboxyl group at C12. The former but not the latter was converted into borrelidin when biotransformed by an S. parvulus mutant that is deficient in the biosynthesis of the borrelidin starter unit. This suggests that 12-desnitrile-12-methyl-borrelidin is a competent biosynthetic intermediate, whereas the carboxylated derivative is a shunt metabolite. Bioconversion of 12-desnitrile-12-methyl-borrelidin into borrelidin was also achieved in a heterologous system co-expressing borI and borJ in Streptomyces albus J1074. This bioconversion was more efficient when borK, which is believed to encode a dehydrogenase, was simultaneously expressed with borI and borJ. On the basis of these findings, a pathway is proposed for the formation of the nitrile moiety during borrelidin biosynthesis.