Nucleoside antibiotics are a large class of pharmaceutically relevant chemical entities, which exhibit a broad spectrum of biological activities. Most nucleosides belong to the canonical N-nucleoside family, where the heterocyclic unit is connected to the carbohydrate through a carbon-nitrogen bond. However, atypical C-nucleosides were isolated from Streptomyces bacteria over 50 years ago, but the molecular basis for formation of these metabolites has been unknown. Here, we have sequenced the genome of S. showdoensis ATCC 15227 and identified the gene cluster responsible for showdomycin production. Key to the detection was the presence of sdmA, encoding an enzyme of the pseudouridine monophosphate glycosidase family, which could catalyze formation of the C-glycosidic bond. Sequence analysis revealed an unusual combination of biosynthetic genes, while inactivation and subsequent complementation of sdmA confirmed the involvement of the locus in showdomycin formation. The study provides the first steps toward generation of novel C-nucleosides by pathway engineering.