Four proteins, DpgA-D, required for the biosynthesis by actinomycetes of the nonproteinogenic amino acid monomer (S)-3,5-dihydroxyphenylglycine (Dpg), that is a crosslinking site in the maturation of vancomycin and teicoplanin antibiotic scaffolds, were expressed in Escherichia coli, purified in soluble form, and assayed for enzymatic activity. DpgA is a type III polyketide synthase, converting four molecules of malonyl-CoA to 3,5-dihydroxyphenylacetyl-CoA (DPA-CoA) and three free coenzyme A (CoASH) products. Almost no turnover was observed for DpgA until DpgB was added, producing a net k(cat) of 1-2 min(-1) at a 3:1 ratio of DpgB:DpgA. Addition of DpgD gave a further 2-fold rate increase. DpgC had the unusual catalytic capacity to convert DPA-CoA to 3,5-dihydroxyphenylglyoxylate, which is a transamination away from Dpg. DpgC performed a net CH(2) to C=O four-electron oxidation on the Calpha of DPA-CoA and hydrolyzed the thioester linkage with a k(cat) of 10 min(-1). Phenylacetyl-CoA was also processed, to phenylglyoxylate, but with about 500-fold lower k(cat)/K(M). DpgC showed no activity in anaerobic incubations, suggesting an oxygenase function, but had no detectable bound organic cofactors or metals. A weak enoyl-CoA hydratase activity was detected for both DpgB and DpgD.