Nodularia spumigena is a filamentous diazotrophic cyanobacterium that forms blooms in brackish water bodies. This cyanobacterium produces linear and cyclic peptide protease inhibitors which are thought to be part of a chemical defense against grazers. Here we show that N. spumigena produces structurally novel members of the aeruginosin family of serine protease inhibitors. Extensive chemical analyses including NMR demonstrated that the aeruginosins are comprised of an N-terminal short fatty acid chain, L-Tyr, L-Choi and L-argininal and in some cases pentose sugar. The genome of N. spumigena CCY9414 contains a compact 18-kb aeruginosin gene cluster encoding a peptide synthetase with a reductive release mechanism which offloads the aeruginosins as reactive peptide aldehydes. Analysis of the aeruginosin and spumigin gene clusters revealed two different strategies for the incorporation of N-terminal protecting carboxylic acids. These results demonstrate that strains of N. spumigena produce aeruginosins and spumigins, two families of structurally similar linear peptide aldehydes using separate peptide synthetases. The aeruginosins were chemically diverse and we found 11 structural variants in 16 strains from the Baltic Sea and Australia. Our findings broaden the known structural diversity of the aeruginosin peptide family to include peptides with rare N-terminal short chain (C2-C10) fatty acid moieties.