Nature synthesizes many strained natural products that have diverse biological activities. Uncovering these biosynthetic pathways may lead to biomimetic strategies for organic synthesis of such compounds. In this work, we elucidated the concise biosynthetic pathway of herquline A, a highly strained and reduced fungal piperazine alkaloid. The pathway builds on a nonribosomal peptide synthetase derived dityrosine piperazine intermediate. Following enzymatic reduction of the P450-cross linked dicyclohexadienone, N-methylation of the piperazine serves as a trigger that leads to a cascade of stereoselective and nonenzymatic transformations. Computational analysis of key steps in the pathway rationalizes the observed reactivities.