(-)-Aurantioclavine (1), which contains a characteristic seven-membered ring fused to an indole ring, belongs to the azepinoindole class of fungal clavine alkaloids. Here we show that starting from a 4-dimethylallyl-l-tryptophan precursor, a flavin adenine dinucleotide (FAD)-binding oxidase and a catalase-like heme-containing protein are involved in the biosynthesis of 1. The function of these two enzymes was characterized by heterologous expression, in vitro characterization, and deuterium labeling experiments.