The myxobacterium Stigmatella aurantiaca DW4/3-1 harbours an astonishing variety of secondary metabolic gene clusters, at least two of which were found by gene inactivation experiments to be connected to the biosynthesis of previously unknown metabolites. In this study, we elucidate the structures of myxochromides S1-3, novel cyclic pentapeptide natural products possessing unsaturated polyketide side chains, and identify the corresponding biosynthetic gene locus, made up of six nonribosomal peptide synthetase modules. By analyzing the deduced substrate specificities of the adenylation domains, it is shown that module 4 is most probably skipped during the biosynthetic process. The polyketide synthase MchA harbours only one module and is presumably responsible for the formation of the variable complete polyketide side chains. These data indicate that MchA is responsible for an unusual iterative polyketide chain assembly.