BE-14106 is a macrocyclic lactam with an acyl side chain previously identified in a marine-derived Streptomyces sp. The gene cluster for BE-14106 biosynthesis was cloned from a Streptomyces strain newly isolated from marine sediments collected in the Trondheimsfjord (Norway). Bioinformatics and experimental analyses of the genes in the cluster suggested an unusual mechanism for assembly of the molecule. Biosynthesis of the aminoacyl starter apparently involves the concerted action of a distinct polyketide synthase (PKS) system and several enzymes that activate and process an amino acid. The resulting starter unit is loaded onto a second PKS complex, which completes the synthesis of the macrolactam ring. Gene inactivation experiments, enzyme assays with heterologously expressed proteins, and feeding studies supported the proposed model for the biosynthesis and provided new insights into the assembly of macrolactams with acyl side chain.