Heterologous expression of a three-gene cluster from Streptomyces aurantiacus coding for a cyclodipeptide synthase, a prenyltransferase, and a methyltransferase led to the elucidation of the biosynthetic steps of streptoazine C (2). In vivo biotransformation experiments proved the high flexibility of the prenyltransferase SasB toward tryptophan-containing cyclodipeptides for regular C-3-prenylation. Furthermore, their corresponding dehydrogenated derivatives prepared by using cyclodipeptide oxidases were also used for prenylation. This study provides an enzyme with high substrate promiscuity from a less explored group of prenyltransferases for potential use to generate prenylated derivatives.