Furaquinocin is a natural polyketide-isoprenoid hybrid (meroterpenoid) that exhibits antitumor activity and is produced by the Streptomyces sp. strain KO-3988. Bioinformatic analysis of furaquinocin biosynthesis has identified Fur7 as a possible prenyltransferase that attaches a geranyl group to an unidentified polyketide scaffold. Here, we report the identification of a physiological polyketide substrate for Fur7, as well as its reaction product and the biochemical characterization of Fur7. A Streptomyces albus transformant (S. albus/pWHM-Fur2_del7) harboring the furaquinocin biosynthetic gene cluster lacking the fur7 gene did not produce furaquinocin but synthesized the novel intermediate 2-methoxy-3-methyl-flaviolin. After expression and purification from Escherichia coli, the recombinant Fur7 enzyme catalyzed the transfer of a geranyl group to 2-methoxy-3-methyl-flaviolin to yield 6-prenyl-2-methoxy-3-methyl-flaviolin and 7-O-geranyl-2-methoxy-3-methyl-flaviolin in a 10:1 ratio. The reaction proceeded independently of divalent cations. When 6-prenyl-2-methoxy-3-methyl-flaviolin was added to the culture medium of S. albus/pWHM-Fur2_del7, furaquinocin production was restored. The promiscuous substrate specificity of Fur7 was demonstrated with respect to prenyl acceptor substrates and prenyl donor substrates. The steady-state kinetic constants of Fur7 with each prenyl acceptor substrate were also calculated.