JBIR-78 (1) and JBIR-95 (2), both of which are heptapeptide derivatives isolated from Kibdelosporangium sp. AK-AA56, have the same amino acid sequences except for the second amino acid: phenylacetic acid (Paa)-l-Val-d-Asp (1)/d-cysteic acid (2)-l-Ala-(3S)-3-hydroxy-d-Leu-Gly-d-Ala-l-Phe. Heterologous expression of the biosynthetic gene cluster including genes encoding nonribosomal peptide synthetases (NRPS) and in vitro assays with recombinant Orf3, an l-cysteic acid synthase homologue, suggested the single A domain in module 2 activates both l-Asp and l-cysteic acid to yield 1 and 2, respectively, although the substrate specificities of the A domains of NRPSs are usually strict. Biosynthetic mechanism of introduction of N-terminal Paa was also investigated. Recombinant Orf1 and Orf2 similar to subunits of pyruvate dehydrogenase complex catalyzed the conversion of phenylpyruvate into phenylacetyl-CoA together with dihydrolipoyl dehydrogenase whose encoding gene is located outside of the gene cluster. Moreover, we showed that phenylacetyl-CoA was directly condensed with l-Val, which was tethered to a peptidyl carrier protein, at the first condensation domain in the NRPS.