Class II terpene cyclases, such as oxidosqualene and squalene-hopene cyclases, catalyse some of the most complex polycyclization reactions. They minimally exhibit a β,γ-didomain architecture that has been evolutionarily repurposed in a wide range of terpene-processing enzymes and likely resulted from a fusion of unidentified monodomain proteins. Although single domain class I terpene cyclases have already been identified, the corresponding class II counterparts have not been previously reported. Here we present high-resolution X-ray structures of a monodomain class II cyclase, merosterolic acid synthase (MstE). With a minimalistic β-domain architecture, this cyanobacterial enzyme is able to construct four rings in cytotoxic meroterpenoids with a sterol-like topology. The structures with bound substrate, product, and inhibitor provide detailed snapshots of a cyclization mechanism largely governed by residues located in a noncanonical enzyme region. Our results complement the few known class II cyclase crystal structures, while also indicating that archaic monodomain cyclases might have already catalyzed complex reaction cascades.