Iterative polyketide synthases (PKSs) are large, multifunctional enzymes that resemble eukaryotic fatty acid synthases but can make highly functionalized secondary metabolites using complex and unresolved programming rules. During biosynthesis of the kinase inhibitor hypothemycin by Hypomyces subiculosus, a highly reducing iterative PKS, Hpm8, cooperates with a nonreducing iterative PKS, Hpm3, to construct the advanced intermediate dehydrozearalenol (DHZ). The identity of putative intermediates in the formation of the highly reduced hexaketide portion of DHZ were confirmed by incorporation of C-13-labeled N-acetylcysteamine (SNAC) thioesters using the purified enzymes. The results show that Hpm8 can accept SNAC thioesters of intermediates that are ready for transfer from its acyl carrier protein domain to its ketosynthase domain and assemble them into DHZ in cooperation with Hpm3. Addition of certain structurally modified analogues of intermediates to Hpm8 and Hpm3 can produce DHZ derivatives.