Fungal polyketide-nonribosomal peptide (PK-NRP) hybrid macrolactones are a growing family of natural products with biomedical and agricultural activities. One of the most important families is the thermolides, which are produced by extreme thermophilic fungi and exhibit strong nematocidal activity. We show here that the genes ThmABCE from Talaromyces thermophilus NRRL 2155 are critical for thermolide synthesis. Two separate single-module hrPKS (ThmA) and NRPS (ThmB) enzymes collaborate to synthesize the core macrolactone backbone (6 or 7), and the NRPS ThmB-C(T) domain catalyzes the key macrocyclization step in PK-NRP intermediate release via ester bond formation, representing a novel function of fungal NRPS C domains. We also show that heterologous and engineered expression of the Thm genes in the type strains of Aspergillus nidulans and Escherichia coli not only dramatically enhances the yields of thermolides but also affords different esterified analogues, such as butyryl- (thermolides J and K, 15 and 16), hexanoyl-, and octanyl- derivatives or mixed thermolides. Thermolides L and M (18 and 19), discovered via genome mining-based combinatorial biosynthesis, represent the first l-phenylalanine-based thermolides. Our work shows a unique biosynthetic mechanism of PK-NRP hybrid macrolactones from extremophiles, which led to the discovery of novel compounds and furthers our biosynthetic knowledge.