The fungal type III polyketide synthase 2'-oxoalkylresorcylic acid synthase (ORAS) primes with a range of acyl-Coenzyme A thioesters (C4-C20) and extends using malonyl-Coenzyme A to produce pyrones, resorcinols, and resorcylic acids. To gain insight into this unusual substrate specificity and product profile, we have determined the crystal structures of ORAS to 1.75 A resolution, the Phe-252-->Gly site-directed mutant to 2.1 A resolution, and a binary complex of ORAS with eicosanoic acid to 2.0 A resolution. The structures reveal a distinct rearrangement of structural elements near the active site that allows accommodation of long-chain fatty acid esters and a reorientation of the gating mechanism that controls cyclization and polyketide chain length. The roles of these structural elements are further elucidated by characterization of various structure-based site-directed variants. These studies establish an unexpected plasticity to the PKS fold, unanticipated from structural studies of other members of this enzyme family.