A phenazine-polyketide hybrid compound, nexphenazine A (1), was isolated from Streptomyces sp. KIB-H483. The bioinformatic analysis of the draft genome of the producing strain and gene inactivation experiments revealed that the biosynthesis of 1 involves a phenazine-polyketide hybrid gene cluster. The abolished production of 1 as well as the accumulation of shunt metabolites 4-7 in mutant strain ΔnpzI revealed the key role of the npzI gene, which encodes an NAD(P)H-dependent ketoreductase, in nexphenazine biosynthesis. The structures and absolute configurations of the isolated intermediates were established on the basis of spectroscopic data analysis, single-crystal X-ray diffraction, chiral chromatography, and chemical conversion experiments. NpzI exhibited stereochemical selectivity in reducing the carbonyl group of 4. Nexphenazine biosynthesis is proposed to involve a condensation of the carboxyl group of phenazine with one molecule of methylmalonyl-CoA by a type I PKS, followed by a ketone reduction by NpzI and an unknown methylation reaction.