Pacidamycins are a family of uridyl tetra/pentapeptide antibiotics that act on the translocase MraY to block bacterial cell wall assembly. To elucidate the biosynthetic logic of pacidamcyins, a putative gene cluster was identified by 454 shotgun genome sequencing of the producer Streptomyces coeruleorubidus NRRL 18370. The 31-kb gene cluster encodes 22 proteins (PacA-V), including highly dissociated nonribosomal peptide synthetase (NRPS) modules and a variety of tailoring enzymes. Gene deletions confirmed that two NRPSs, PacP and PacO, are required for the biosynthesis of pacidamycins. Heterologous expression and in vitro assays of PacL, PacO, and PacP established reversible formation of m-Tyr-AMP, l-Ala-AMP, and diaminopropionyl-AMP, respectively, consistent with the amino acids found in pacidamycin scaffolds. The unusual Ala(4)-Phe(5) dipeptidyl ureido linkage was formed during in vitro assays containing purified PacL, PacJ, PacN, and PacO. Both the genetic and enzymatic studies validate identification of the biosynthetic genes for this subclass of uridyl peptide antibiotics and provide the basis for future mechanistic study of their biosynthesis.