Polycyclic tetramate macrolactams (PoTeMs) are a family of structurally intriguing bioactive natural products. Although the presence of the N-28 methyl group is known to affect bioactivities of some PoTeMs, the mechanism for this methylation remains unclear. We report here the identification and characterization of the 28-N-methyltransferase for HSAF analogues, which is encoded by a gene located outside the HSAF (heat-stable antifungal factor) cluster in Lysobacter enzymogenes C3. Our data suggested that 28-N-methyltransferase utilizes S-adenosylmethionine (SAM) to methylate HSAF analogues, and acts after the dicyclic and tricyclic ring formation and prior to C-3 hydroxylation. Kinetic analysis showed that the optimal substrate for the enzyme is 3-dehydroxy HSAF (3-deOH HSAF). Moreover, it could also accept PoTeMs bearing a 5-6 or 5-6-5 polycyclic system as substrates. This is the first N-methyltransferase identified in the family of PoTeMs, and the identification of this enzyme provides a new tool to generate new PoTeMs as antibiotic lead compounds.