The biosynthetic gene cluster of γ-aminobutyric acid (GABA)-containing fungal cyclic heptapeptides unguisins A (1) and B (2) was identified in the fungus Aspergillus violaceofuscus CBS 115571. In vitro enzymatic reactions and gene deletion experiments revealed that the unguisin pathway involves the alanine racemase UngC to provide d-alanine, which is then accepted by the first adenylation domain of the nonribosomal peptide synthetase (NRPS) UngA. Intriguingly, the hydrolase UngD was found to transform unguisins into previously undescribed linear peptides. Subsequently, heterologous production of these peptides in Aspergillus oryzae was achieved, in which we established a methodology to readily introduce a large NRPS gene into the fungal host. Finally, genome mining revealed new unguisin congeners, each containing a (2R,3R)-β-methylphenylalanine residue.