Cryptic natural product biosynthetic pathways discovered by genome mining are a promising source of novel bioactive natural products. Here we report the identification, isolation and structure elucidation of coelimycin P1, an unusual yellow-pigmented metabolic product of the cpk cryptic polyketide biosynthetic gene cluster of Streptomyces coelicolor M145, using a genetic engineering strategy designed to increase metabolic flux through the biosynthetic pathway. This resulted in overproduction of the yellow pigment, which was identified by HPLC comparison of the metabolite profile of culture supernatants of the engineered strain and an equivalent strain from which the cpk gene cluster had been deleted. Isolation and structure elucidation of the pigment revealed that it is a novel alkaloid containing a unique functionalized 1,5-oxathiocane. Sequence analysis of the enzymes encoded by the cpk gene cluster led us to propose a pathway for coelimycin P1 biosynthesis that is fully consistent with the results of incorporation experiments utilizing isotope-labelled precursors.