Sativene (1) and seco-sativene are an important family of fungal sesquiterpenoids that feature unique tricyclo[4.4.0.01,7]decane and bicyclo[3.2.1]octane skeletons, respectively. Herein, we identify a three-enzyme cassette: SatA cyclizes farnesyl diphosphate (FPP) to form compound 1; CYP450 SatB catalyzes C14-C15 dihydroxylations and subsequent bond cleavage; and reductase SatC regioselectively reduces C14 aldehyde and mediates hemiacetal ring closure to generate prehelminthosporol (2). Our findings clarify the synthetic step of sativene and its oxidative transformation processes into seco-sativene.