Salinomycin from Streptomyces albus DSM 41398 is an antibiotic polyether ionophore with a complex tricyclic bispiroacetal core structure, which has attracted renewed interest due to its potent and selective activity against cancer stem cells. We cloned and analyzed the salinomycin biosynthetic gene cluster from S. albus DSM 41398, and found that the polyketide chain is synthesized on an assembly line of nine polyketide synthase (PKS) multienzymes, including a loading module and 14 extension modules. Targeted deletion of salC, a gene encoding a flavin-linked epoxidase involved in oxidative cyclization, resulted in the accumulation of a novel polyketide diene intermediate. Structural analysis of this intermediate provided direct evidence that the unusual cis double bond at C18-C19 in salinomycin is introduced only after completion of the polyketide chain. Furthermore, analysis of the gene cluster revealed the modular structure of the PKS and possible mechanisms of chain termination, leading to a proposed model for salinomycin biosynthesis. Our results provide key insights into the biosynthetic pathway of salinomycin and establish a necessary platform for attempts to modify its structure through biosynthetic engineering.