The biosynthesis of aurachin derivatives includes the conversion of aurachin C to B via the migration of the prenyl group from position C3 to C4, presumably through a pinacol-type rearrangement, but this biosynthetic hypothesis had not been biochemically proven. To uncover the enzymatic chemistry behind this intriguing rearrangement reaction, we performed in vitro experiments using recombinant AuaG and AuaH proteins. We found that AuaG, a novel FAD-dependent monooxygenase, catalyzes epoxidation coupled with semipinacol rearrangement to mediate the prenyl migration, while AuaH, a ketoreductase, stabilizes the intermediate to complete the reaction. In summary, we have reported a novel enzymatic system that establishes prenyl migration by employing AuaG and AuaH. This discovery provides important information regarding enzymatic rearrangements in natural product biosynthesis and triggers efforts to achieve biomimetic semipinacol rearrangements in organic synthesis.