Hypothemycin is a macrolide protein kinase inhibitor from the fungus Hypomyces subiculosus. During biosynthesis, its carbon framework is assembled by two iterative polyketide synthases (PKSs), Hpm8 (highly reducing) and Hpm3 (nonreducing). These were heterologously expressed in Saccharomyces cerevisiae BJ5464-NpgA, purified to near homogeneity, and reconstituted in vitro to produce (6'S,10'S)-trans-7',8'-dehydrozearalenol (1) from malonyl-CoA and NADPH. The structure of 1 was determined by X-ray crystallographic analysis. In the absence of functional Hpm3, the reducing PKS Hpm8 produces and offloads truncated pyrone products instead of the expected hexaketide. The nonreducing Hpm3 is able to accept an N-acetylcysteamine thioester of a correctly functionalized hexaketide to form 1, but it is unable to initiate polyketide formation from malonyl-CoA. We show that the starter-unit:ACP transacylase (SAT) of Hpm3 is critical for crosstalk between the two enzymes and that the rate of biosynthesis of 1 is determined by the rate of hexaketide formation by Hpm8.