Sponge metagenomes are a useful platform to mine cryptic biosynthetic gene clusters responsible for production of natural products involved in the sponge-microbe association. Since numerous sponge-derived bioactive metabolites are biosynthesized by the symbiotic bacteria, this strategy may concurrently reveal sponge-symbiont produced compounds. Accordingly, a metagenomic analysis of the Japanese marine sponge Discodermia calyx has resulted in the identification of a hybrid type I polyketide synthase-nonribosomal peptide synthetase gene (kas). Bioinformatic analysis of the gene product suggested its involvement in the biosynthesis of kasumigamide, a tetrapeptide originally isolated from freshwater free-living cyanobacterium Microcystis aeruginosa NIES-87. Subsequent investigation of the sponge metabolic profile revealed the presence of kasumigamide in the sponge extract. The kasumigamide producing bacterium was identified as an 'Entotheonella' sp. Moreover, an in silico analysis of kas gene homologs uncovered the presence of kas family genes in two additional bacteria from different phyla. The production of kasumigamide by distantly related multiple bacterial strains implicates horizontal gene transfer and raises the potential for a wider distribution across other bacterial groups.