Over two hundred species of plants can be infected by the phytopathogenic fungus Botrytis cinerea under a range of different environmental conditions. In response to these, the fungus produces unique terpenoid and polyketide metabolites. Parts of the plants may be killed by the phytotoxin botrydial, enabling the fungus to feed on the dead cells. In this paper, we describe the genetic and molecular basis of botrydial biosynthesis and the function of the five genes of the genome of B. cinerea that together constitute the botrydial biosynthetic gene cluster. Genes BcBOT3 and BcBOT4, encoding two cytochrome P450 monooxygenases, were inactivated by homologous recombination and were shown to catalyze regio- and stereospecific hydroxylations at the carbons C-10 and C-4, respectively, of the presilphiperfolan-8β-ol skeleton. The null mutants, bcbot3Δ and bcbot4Δ, accumulated key intermediates in the botrydial biosynthesis enabling the complete genetic and molecular basis of the botrydial biosynthetic pathway to be established. Furthermore, the bcbot4Δ mutant overproduced a significant number of polyketides, which included, in addition to known botcinins, botrylactones and cinbotolide A, two new botrylactones and two new cinbotolides, cinbotolides B and C.