Aflatrem is a potent tremorgenic toxin produced by the soil fungus Aspergillus flavus, and a member of a structurally diverse group of fungal secondary metabolites known as indole-diterpenes. Gene clusters for indole-diterpene biosynthesis have recently been described in several species of filamentous fungi. A search of Aspergillus complete genome sequence data identified putative aflatrem gene clusters in the genomes of A. flavus and Aspergillus oryzae. In both species the genes for aflatrem biosynthesis cluster at two discrete loci; the first, ATM1, is telomere proximal on chromosome 5 and contains a cluster of three genes, atmG, atmC, and atmM, and the second, ATM2, is telomere distal on chromosome 7 and contains five genes, atmD, atmQ, atmB, atmA, and atmP. Reverse transcriptase PCR in A. flavus demonstrated that aflatrem biosynthesis transcript levels increased with the onset of aflatrem production. Transfer of atmP and atmQ into Penicillium paxilli paxP and paxQ deletion mutants, known to accumulate paxilline intermediates paspaline and 13-desoxypaxilline, respectively, showed that AtmP is a functional homolog of PaxP and that AtmQ utilizes 13-desoxypaxilline as a substrate to synthesize aflatrem pathway-specific intermediates, paspalicine and paspalinine. We propose a scheme for aflatrem biosynthesis in A. flavus based on these reconstitution experiments in P. paxilli and identification of putative intermediates in wild-type cultures of A. flavus.