The biosynthetic gene cluster of atlantinone B (10) was discovered in Penicillium chrysogenum MT-40. A multifunctional cytochrome P450 (AtlD) encoded by the cluster is responsible for the formation of the unique lactone-bridged ring and the 16β-hydroxyl of atlantinone B, and a new terpene cyclase (AtlC) can unprecedentedly accept the demethylated substrate epoxyfarnesyl-DMOA (4a) to generate three bicyclic meroterpenoids (5a-5c). This study paves the way for combinatorial synthesis of structurally diverse meroterpenoids for drug discovery.