Quinolactacins are novel fungal alkaloids that feature a quinolone-gamma-lactam hybrid, which is a potential pharmacophore for the treatment of cancer and Alzheimer's disease. Herein, we report the identification of the quinolactacin A2 biosynthetic gene cluster and elucidate the enzymatic basis for the formation of the quinolone-gamma-lactam structure. We reveal an unusual beta-keto acid (N-methyl-2-aminobenzoylacetate) precursor that is derived from the primary metabolitel-kynurenine via methylation, oxidative decarboxylation, and amide hydrolysis reactions. In vitro assays reveal two single-module non-ribosomal peptide synthetases (NRPs) that incorporate the beta-keto acid andl-isoleucine, followed by Dieckmann condensation, to form the quinolone-gamma-lactam. Notably, the bioconversion froml-kynurenine to the beta-keto acid is a unique strategy employed by nature to decouple R*-domain-containing NRPS from the polyketide synthase (PKS) machinery, expanding the paradigm for the biosynthesis of quinolone-gamma-lactam natural products via Dieckmann condensation.