The indolizidine alkaloid swainsonine (SW) is a deadly mycotoxin to livestock that can be produced by different plant-associated fungi, including the endophytic entomopathogenic fungi Metarhizium species. The SW biosynthetic gene cluster has been identified but the genetic mechanism of SW biosynthesis remains obscure. To unveil the SW biosynthetic pathway, we performed gene deletions in M. robertsii, heterologous expression of a core biosynthetic gene, substrate feedings, mass spectrometry, and bioassay analyses in this study. It was unveiled that SW is produced via a multibranched pathway by the hybrid nonribosomal peptide-polyketide synthase (NRPS-PKS) gene cluster in M. robertsii. The precursor pipecolic acid can be converted from lysine by both the SW biosynthetic cluster and the unclustered genes such as lysine cyclodeaminase. The hybrid NRPS-PKS enzyme produces three intermediates with and without domain skipping. Intriguingly, the biosynthetic process is coupled with the cis to trans nonenzymatic epimerization of C1-OH for both hydroxyl- and dihydroxyl-indolizidine intermediates. We also found that SW production was dispensable for fungal colonization of plants and infection of insect hosts. Functional characterization of the SW biosynthetic genes in this study may benefit the safe use of Metarhizium fungi as insect biocontrol agents and the management of livestock pastures from SW contamination by genetic manipulation of the toxin-producing fungi.