The S-glycosyltransferase SunS is a recently discovered enzyme that selectively catalyzes the conjugation of carbohydrates to the cysteine thiol of proteins. This study reports the discovery of a second S-glycosyltransferase, ThuS, and shows that ThuS catalyzes both S-glycosylation of the thiol of cysteine and O-glycosylation of the hydroxyl group of serine in peptide substrates. ThuS-catalyzed S-glycosylation is more efficient than O-glycosylation, and the enzyme demonstrates high tolerance with respect to both nucleotide sugars and peptide substrates. The biosynthesis of the putative products of the thuS gene cluster was reconstituted in vitro, and the resulting S-glycosylated peptides thurandacin A and B exhibit highly selective antimicrobial activity toward Bacillus thuringiensis.