The entomopathogenic bacterium Xenorhabdus bovienii exists in a mutualistic relationship with nematodes of the genus Steinernema. Free-living infective juveniles of Steinernema prey on insect larvae and regurgitate X. bovienii within the hemocoel of a host larva. X. bovienii subsequently produces a complex array of specialized metabolites and effector proteins that kill the insect and regulate various aspects of the trilateral symbiosis. While Xenorhabdus species are rich producers of secondary metabolites, many of their biosynthetic gene clusters remain uncharacterized. Here, we describe a nonribosomal peptide synthetase (NRPS) identified through comparative genomics analysis that is widely conserved in Xenorhabdus species. Heterologous expression of this NRPS gene from X. bovienii in E. coli led to the discovery of a family of lipo-tripeptides that chromatographically appear as pairs, containing either a C-terminal carboxylic acid or carboxamide. Coexpression of the NRPS with the leupeptin protease inhibitor pathway enhanced production, facilitating isolation and characterization efforts. The new lipo-tripeptides were also detected in wild-type X. bovienii cultures. These metabolites, termed bovienimides, share an uncommon C-terminal d-citrulline residue. The NRPS lacked a dedicated chain termination domain, resulting in product diversification and release from the assembly line through reactions with ammonia, water, or exogenous alcohols.