Saxitoxin (STX) and its analogues cause the paralytic shellfish poisoning (PSP) syndrome, which afflicts human health and impacts coastal shellfish economies worldwide. PSP toxins are unique alkaloids, being produced by both prokaryotes and eukaryotes. Here we describe a candidate PSP toxin biosynthesis gene cluster (sxt) from Cylindrospermopsis raciborskii T3. The saxitoxin biosynthetic pathway is encoded by more than 35 kb, and comparative sequence analysis assigns 30 catalytic functions to 26 proteins. STX biosynthesis is initiated with arginine, S-adenosylmethionine, and acetate by a new type of polyketide synthase, which can putatively perform a methylation of acetate, and a Claisen condensation reaction between propionate and arginine. Further steps involve enzymes catalyzing three heterocyclizations and various tailoring reactions that result in the numerous isoforms of saxitoxin. In the absence of a gene transfer system in these microorganisms, we have revised the description of the known STX biosynthetic pathway, with in silico functional inferences based on sxt open reading frames combined with liquid chromatography-tandem mass spectrometry analysis of the biosynthetic intermediates. Our results indicate the evolutionary origin for the production of PSP toxins in an ancestral cyanobacterium with genetic contributions from diverse phylogenetic lineages of bacteria and provide a quantum addition to the catalytic collective available for future combinatorial biosyntheses. The distribution of these genes also supports the idea of the involvement of this gene cluster in STX production in various cyanobacteria.