Monascus azaphilone pigments (MonAzPs) are very widely used as food colorants, but their biosynthetic pathway has remained poorly characterized for more than half a century. In this study, the individual steps of MonAzPs biosynthesis in Monascus ruber M7 were elucidated by a combination of targeted gene knockouts, heterologous gene expression, and in vitro chemical and enzymatic reactions. This study describes the first rational engineering of MonAzPs biosynthesis and provides a roadmap for future pathway engineering efforts directed towards the selective production of the most valuable pigments and serves as a model for the biosynthesis of fungal azaphilones in general.