Class II lanthipeptide synthetases (LanM enzymes) catalyze the multistep post-translational modification of genetically encoded precursor peptides into macrocyclic (often antimicrobial) lanthipeptides. The reaction sequence involves dehydration of serine/threonine residues, followed by intramolecular addition of cysteine thiols onto the nascent dehydration sites to construct thioether bridges. LanMs utilize two separate active sites in an iterative yet highly coordinated manner to maintain a remarkable level of regio- and stereochemical control over the multistep maturation. The mechanisms underlying this biosynthetic fidelity remain enigmatic. We recently demonstrated that proper function of the haloduracin β synthetase (HalM2) requires dynamic structural elements scattered across the surface of the enzyme. Here, we perform kinetic simulations, structural analysis of reaction intermediates, hydrogen-deuterium exchange mass spectrometry studies, and molecular dynamics simulations to investigate the contributions of these dynamic HalM2 structural elements to biosynthetic efficiency and fidelity. Our studies demonstrate that a large, conserved loop (HalM2 residues P349-P405) plays essential roles in defining the precursor peptide binding site, facilitating efficient peptide dehydration, and guiding the order of thioether ring formation. Moreover, mutations near the interface of the HalM2 dehydratase and cyclase domains perturb cyclization fidelity and result in aberrant thioether topologies that cannot be corrected by the wild type enzyme, suggesting an element of kinetic control in the normal cyclization sequence. Overall, this work provides the most comprehensive correlation of the structural and functional properties of a LanM enzyme reported to date and should inform mechanistic studies of the biosynthesis of other ribosomally synthesized and post-translationally modified peptide natural products.