Plumbago indica L. contains naphthoquinones that are derived from six acetate units. To characterize the enzyme catalyzing the first step in the biosynthesis of these metabolites, a cDNA encoding a type III polyketide synthase (PKS) was isolated from roots of P. indica. The translated polypeptide shared 47–60% identical residues with PKSs from other plant species. Recombinant P. indica PKS expressed in Escherichia coli accepted acetyl-CoA as starter and carried out five decarboxylative condensations with malonyl coenzyme A (-CoA). The resulting hexaketide was not folded into a naphthalene derivative. Instead, an α-pyrone, 6-(2′,4′-dihydroxy-6′-methylphenyl)-4-hydroxy-2-pyrone, was produced. In addition, formation of α-pyrones with linear keto side chains derived from three to six acetate units was observed. As phenylpyrones could not be detected in P. indica roots, we propose that the novel PKS is involved in the biosynthesis of naphthoquinones, and additional cofactors are probably required for the biosynthesis of these secondary metabolites in vivo.