The decarbonylation reaction has been developed significantly in organic chemistry as an effective approach to various synthetic applications, but enzymatic precedents for this reaction are rare. Based on investigations into the hybrid nonribosomal peptide synthetase (NRPS)-polyketide synthase (PKS) assembly line of barbamide, we report an on-line α-ketothioester decarbonylation reaction that leads to one-carbon truncation of the elongating skeleton. This enzymatic editing reaction occurs in the first round of lipopeptide extension and modification involving the multienzymes BarE and BarF, which successively house an NRPS module to initiate the biosynthesis and a PKS module to catalyze the first round of chain extension. Starting with processing a leucine-derived α-ketoacyl starter, the ketosynthase domain in BarE displays an unusual dual activity that results in net one-carbon chain elongation. It extrudes carbon monoxide from α-keto-isocaproyl thioester and then mediates decarboxylative condenses of the resultant isovaleryl thioester with malonyl thioester to form a diketide intermediate, followed by BarF-based O-methylation to stabilize the enol form of the β-carbonyl and afford an unusual E-double bond. Biochemical characterization, chemical synthesis, computational analysis, and the experimental outcome of site-directed mutagenesis illustrate the extraordinary catalytic capability of this ketosynthase domain. This work furthers the appreciation of assembly line chemistry and opens the door to new approaches for skeleton editing/engineering of related molecules using synthetic biology approaches.