β-Ketoacyl-acyl carrier protein (β-Ketoacyl-ACP) synthase (KAS) III catalyzes the first step in fatty acid biosynthesis, involving a Claisen condensation of the acetyl-CoA starter unit with the first extender unit, malonyl-ACP, to form acetoacetyl-ACP. KAS III-like proteins have also been reported to catalyze acyltransferase reactions using coenzyme A esters or discrete ACP-bound substrates. Here, we report the in vivo and in vitro characterizations of a KAS III-like protein (PtmR), which directly transfers a 6-methylsalicylyl moiety from an iterative type I polyketide synthase to an aminocyclopentitol unit in pactamycin biosynthesis. PtmR is highly promiscuous, recognizing a wide array of S-acyl-N-acetylcysteamines as substrates to produce a suite of pactamycin derivatives with diverse alkyl and aromatic features. The results suggest that KAS III-like proteins may be used as versatile tools for modifications of complex natural products.