Entomopathogenic fungus Metarhizium majus contains the nine-gene PPZ cluster, with ppzA, encoding a peramine-producing nonribosomal peptide synthetase, as the central component. In this work, the roles of two α-ketoglutarate, iron-dependent oxygenases encoded by the PPZ genes ppzC and ppzD were elucidated. PpzD was found to produce both trans-4-hydroxy-l-proline and trans-3-hydroxy-l-proline in a 13.1:1 ratio, yielding a key precursor for peramine biosynthesis. PpzC was found to act directly on peramine, yielding the novel analogue 8-hydroxyperamine.