Genome mining is a promising method to discover novel secondary metabolites in the postgenomic era. We applied the Aspergillus oryzae heterologous expression system to functionally characterize cryptic bifunctional terpene synthase genes found in fungal genomes and identified the sesterfisherol synthase gene (NfSS) from Neosartorya fischeri. Sesterfisherol contains a characteristic 5-6-8-5 tetracyclic ring system and is modified by cytochrome P450 monooxygenase (NfP450) to sesterfisheric acid. The cyclization mechanism was proposed on the basis of the analysis of in vivo and in vitro enzymatic reactions with isotopically labeled precursors. The mechanism involves Cl cation-olefin IV-olefin V cyclization followed by five hydride shifts, allowing us to propose a unified biogenesis for sesterterpenes branching from bicyclic (5-15), tricyclic (5-12-5), and tetracyclic (5-6-8-5) cation intermediates. Furthermore, the mechanism is distinct from that of a separate class of di/sesterterpenes including fusicoccins and ophiobolins. The difference between mechanisms is consistent with phylogenetic analysis of bifunctional terpene synthases, suggesting that the amino acid sequence reflects the initial cyclization mode, which is most likely related to the initial conformation of a linear prenyl diphosphate.