Polycyclic tetramate macrolactams (PTMs) are a class of structurally complex hybrid polyketide-nonribosomal peptide (PK-NRP) natural products produced by diverse bacteria. Several PTMs display pharmaceutically interesting bioactivities, and the early stages of PTM biosynthesis involving polyketide synthase (PKS) and nonribosomal peptide synthetase (NRPS) enzymology are well studied. However, the timing and mechanisms of post PKS-NRPS oxidations by P450 monooxygenases encoded in PTM biosynthetic gene clusters (BGCs) remain poorly characterized. Here we demonstrate that CftA, encoded in clifednamide-type PTM BGCs, is a multifunctional P450 monooxygenase capable of converting the C29-C30 ethyl side chain of ikarugamycin to either a C29-C30 methyl ketone or a C29-C30 hydroxymethyl ketone through C-H bond activation, resulting in the formation of clifednamide A or clifednamide C, respectively. We also report the complete structure of clifednamide C solved via multidimensional NMR (COSY, HSQC, HMBC, NOESY, and TOCSY) using material purified from an engineered <i>Streptomyces</i> strain optimized for production. Finally, the <i>in vitro</i> reconstitution of recombinant CftA catalytic activity revealed the oxidation cascade for sequential conversion of ikarugamycin to clifednamide A and clifednamide C. Our findings confirm prior genetics-based predictions on the origins of clifednamide complexity via P450s encoded in PTM BGCs and place CftA into a growing group of multifunctional P450s that tailor PTM natural products through late-stage regioselective C-H bond activation.