Cone snails produce highly complex venom comprising mostly small biologically active peptides known as conotoxins or conopeptides. Early estimates that suggested 50-200 venom peptides are produced per species have been recently increased at least 10-fold using advanced mass spectrometry. To uncover the mechanism(s) responsible for generating this impressive diversity, we used an integrated approach combining second-generation transcriptome sequencing with high sensitivity proteomics. From the venom gland transcriptome of Conus marmoreus, a total of 105 conopeptide precursor sequences from 13 gene superfamilies were identified. Over 60% of these precursors belonged to the three gene superfamilies O1, T, and M, consistent with their high levels of expression, which suggests these conotoxins play an important role in prey capture and/or defense. Seven gene superfamilies not previously identified in C. marmoreus, including five novel superfamilies, were also discovered. To confirm the expression of toxins identified at the transcript level, the injected venom of C. marmoreus was comprehensively analyzed by mass spectrometry, revealing 2710 and 3172 peptides using MALDI and ESI-MS, respectively, and 6254 peptides using an ESI-MS TripleTOF 5600 instrument. All conopeptides derived from transcriptomic sequences could be matched to masses obtained on the TripleTOF within 100 ppm accuracy, with 66 (63%) providing MS/MS coverage that unambiguously confirmed these matches. Comprehensive integration of transcriptomic and proteomic data revealed for the first time that the vast majority of the conopeptide diversity arises from a more limited set of genes through a process of variable peptide processing, which generates conopeptides with alternative cleavage sites, heterogeneous post-translational modifications, and highly variable N- and C-terminal truncations. Variable peptide processing is expected to contribute to the evolution of venoms, and explains how a limited set of ∼ 100 gene transcripts can generate thousands of conopeptides in a single species of cone snail.