<jats:title>Abstract</jats:title><jats:p>The biosynthetic gene cluster of the aromatic polyketide antibiotic actinorhodin (ACT) in <jats:italic>Streptomyces coelicolor</jats:italic> A3(2) carries a pair of genes, <jats:italic>act</jats:italic>VA‐ORF5 and <jats:italic>act</jats:italic>VB, that encode a two‐component flavin‐dependent monooxygenase (FMO). Our previous studies have demonstrated that the ActVA‐ORF5/ActVB system functions as a quinone‐forming C‐6 oxygenase in ACT biosynthesis. Furthermore, we found that this enzyme system exhibits an additional oxygenation activity with dihydrokalafungin (DHK), a proposed intermediate in the ACT biosynthetic pathway, and generates two reaction products. These compounds were revealed to be monooxygenated derivatives of kalafungin, which is spontaneously formed through oxidative lactonization of DHK. Their absolute structures were elucidated from their NMR spectroscopic data and by computer modeling and X‐ray crystallography as (5<jats:italic>S</jats:italic>,14<jats:italic>R</jats:italic>)‐epoxykalafungin and (5<jats:italic>R</jats:italic>,14<jats:italic>S</jats:italic>)‐epoxykalafungin, demonstrating an additional epoxyquinone‐forming activity of the ActVA‐ORF5/ActVB system in vitro.