Microbes produce specialized metabolites to thrive in their natural habitats. However, it is rare that a given specialized metabolite is biosynthesized via pathways with distinct intermediates and enzymes. Here, we show that the core assembly mechanism of the antibiotic indolmycin in marine gram-negative Pseudoalteromonas luteoviolacea is distinct from its counterpart in terrestrial gram-positive Streptomyces species, with a molecule that is a shunt product in the Streptomyces pathway employed as a biosynthetic substrate for a novel metal-independent N-demethylindolmycin synthase in the P. luteoviolacea pathway. To provide insight into this reaction, we solved the 1.5 Å resolution structure in complex with product and identified the active site residues. Guided by our biosynthetic insights, we then engineered the Streptomyces indolmycin producer for titer improvement. This study provides a paradigm for understanding how two unique routes to a microbial specialized metabolite can emerge from convergent biosynthetic transformations.