We report 12 cyanobactin cyclic peptides, the aestuaramides, from the cultivated cyanobacterium Lyngbya aestuarii. We show that aestuaramides are synthesized enzymatically as reverse O-prenylated tyrosine ethers that subsequently undergo a Claisen rearrangement to produce forward C-prenylated tyrosine. These results reveal that a nonenzymatic Claisen rearrangement dictates isoprene regiochemistry in a natural system. They also reveal one of the mechanisms that organisms use to generate structurally diverse compound libraries starting from simple ribosomal peptide pathways (RiPPs).