Bacterial meroterpenoids constitute an important class of natural products with diverse biological properties and therapeutic potential. The biosynthetic logic for their production is unknown and defies explanation via classical biochemical paradigms. A large subgroup of naphthoquinone-based meroterpenoids exhibits a substitution pattern of the polyketide-derived aromatic core that seemingly contradicts the established reactivity pattern of polyketide phenol nucleophiles and terpene diphosphate electrophiles. We report the discovery of a hitherto unprecedented enzyme-promoted α-hydroxyketone rearrangement catalysed by vanadium-dependent haloperoxidases to account for these discrepancies in the merochlorin and napyradiomycin class of meroterpenoid antibiotics, and we demonstrate that the α-hydroxyketone rearrangement is potentially a conserved biosynthetic reaction in this molecular class. The biosynthetic α-hydroxyketone rearrangement was applied in a concise total synthesis of naphthomevalin, a prominent member of the napyradiomycin meroterpenes, and sheds further light on the mechanism of this unifying enzymatic transformation.