Insect pathogenic fungi produce a plethora of insecticidally and pharmaceutically active compounds, including 39 cyclohexadepsipeptide destruxins (dtxs). Even though dtxs were first discovered more than 50 y ago, the genes responsible for their biosynthesis were unknown until this study. Based on our comparative genomic information and targeted gene disruptions, we report the gene cluster for dtx biosynthesis in the insect pathogen Metarhizium robertsii. The nonribosomal peptide synthetase DtxS1 has six adenylation domains, two of which are capable of selecting different amino acids to synthesize dtx B and its analogs. The cytochrome P450 enzyme DtxS2 converts dtx B into other dtxs by a chain of reactions, each producing a new derivative. The aldo-keto reductase DtxS3 and aspartic acid decarboxylase DtxS4 are responsible for the conversion and provision of the first and last substrates for the dtx assembly line, respectively. Insect bioassays showed that dtxs could suppress both cellular and humoral immune responses thereby assisting fungal propagation in insects. The differing abilities of Metarhizium species to produce toxins is dependent on the presence of the dtxS1 gene. The toxigenic species are capable of killing multiple orders of insects, whereas the nontoxigenic Metarhizium spp. have narrow host ranges. Thus, the acquisition or retention of the dtx biosynthesis gene cluster in Metarhizium lineages has been coordinated with the evolution of fungal host specificity. The data from this study will facilitate the development of dtxs as bioinsecticides or pharmaceuticals.