The polyketide signaling metabolites bacillaene and dihydrobacillaene are biosynthesized in
Bacillus subtilison an enzymatic assembly line with both nonribosomal peptide synthetase (NRPS) and polyketide synthase (PKS) modules acting along with catalytic domains servicing the assembly line in trans. These signaling metabolites possess the unusual starter unit α-hydroxyisocaproate (α-HIC). We show here that it arises from initial activation of α-ketoisocaproate (α-KIC) by the first adenylation domain of PksJ (a hybrid PKS/NRPS) and installation on the pantetheinyl arm of the adjacent thiolation (T) domain. The α-KIC unit is elongated to α-KIC-Gly by the second NRPS module in PksJ as demonstrated by mass spectrometric analysis. The third module of PksJ uses PKS logic and contains an embedded ketoreductase (KR) domain along with two adjacent T domains. We show that this KR domain reduces canonical 3-ketobutyryl chains but also the α-keto group of α-KIC-containing intermediates on the PksJ T-domain doublet. This KR activity accounts for the α-HIC moiety found in the dihydrobacillaene/bacillaene pair and represents an example of an assembly-line dual-function α- and β-KR acting on disparate positions of a growing chain intermediate.