The late-stage biosynthetic pathway of the indole diterpene shearinine involving four enzymatic reactions (JanQDOJ) was elucidated by an efficient heterologous expression system using Aspergillus oryzae. Key oxidative cyclization, forming a characteristic A/B bicyclic shearinine core by flavoprotein oxidase, was studied using a substrate analogue and a buffer containing H218O. These experimental data provided evidence that JanO catalyzes two-step oxidation via a hydroxylated product and that the JanO reaction involves the hydride-transfer mechanism.