Due to the importance of proteases in regulating cellular processes, the development of protease inhibitors has garnered great attention. Peptide-based aldehydes are a class of compounds that exhibit inhibitory activities against various proteases and proteasomes in the context of anti-proliferative treatments for cancer and other diseases. More than a dozen peptide-based natural products containing aldehydes have been discovered such as chymostatin, leupeptin, and fellutamide; however, the biosynthetic origin of the aldehyde functionality has yet to be elucidated. Herein we describe the discovery of a new group of lipopeptide aldehydes, the flavopeptins, and the corresponding biosynthetic pathway arising from an orphan gene cluster in Streptomyces sp. NRRL-F6652, a close relative of Streptomyces flavogriseus ATCC 33331. This research was initiated using a proteomics approach that screens for expressed enzymes involved in secondary metabolism in microorganisms. Flavopeptins are synthesized through a non-ribosomal peptide synthetase containing a terminal NAD(P)H-dependent reductase domain likely for the reductive release of the peptide with a C-terminal aldehyde. Solid-phase peptide synthesis of several flavopeptin species and derivatives enabled structural verification and subsequent screening of biological activity. Flavopeptins exhibit sub-micromolar inhibition activities against cysteine proteases such as papain and calpain as well as the human 20S proteasome. They also show anti-proliferative activities against multiple myeloma and lymphoma cell lines.