Microbial natural products are an important source of chemical entities for drug discovery. Recent advances in understanding the biosynthesis of secondary metabolites has revealed how this rich chemical diversity is generated through functional differentiation of biosynthetic enzymes. For instance, investigations into anthracycline anticancer agents have uncovered distinct S-adenosyl methionine (SAM)-dependent proteins: DnrK is a 4-O-methyltransferase involved in daunorubicin biosynthesis, whereas RdmB (52% sequence identity) from the rhodomycin pathway catalyzes 10-hydroxylation. Here, we have mined unknown anthracycline gene clusters and discovered a third protein subclass catalyzing 10-decarboxylation. Subsequent isolation of komodoquinone B from two Streptomyces strains verified the biological relevance of the decarboxylation activity. Phylogenetic analysis inferred two independent routes for the conversion of methyltransferases into hydroxylases, with a two-step process involving loss-of-methylation and gain-of-hydroxylation presented here. Finally, we show that simultaneously with the functional differentiation, the evolutionary process has led to alterations in substrate specificities.