<jats:title>Abstract</jats:title><jats:p>The rice seedling blight fungus <jats:italic>Rhizopus microsporus</jats:italic> harbors endosymbiotic bacteria (<jats:italic>Burkholderia rhizoxinica</jats:italic>) that produce the virulence factor rhizoxin and control host development. Genome mining indicated a massive inventory of cryptic nonribosomal peptide synthetase (NRPS) genes, which have not yet been linked to any natural products. The discovery and full characterization of a novel cyclopeptide from endofungal bacteria is reported. In silico analysis of an orphan, symbiont‐specific NRPS predicted the structure of a nonribosomal peptide, which was targeted by LC‐MS/MS profiling of wild‐type and engineered null mutants. NMR spectroscopy and chemical derivatization elucidated the structure of the bacterial cyclopeptide. Phylogenetic analyses revealed the relationship of starter C domains for rare N‐acetyl‐capped peptides. Heptarhizin is produced under symbiotic conditions in geographically constrained strains from the Pacific clade; this indicates a potential ecological role of the peptide.