Nosiheptide, a potent bicyclic member of the family of thiopeptide antibiotics, possesses a distinctive L-Trp-derived indolyl moiety: The way in which this moiety is incorporated into a ribosomally synthesized and post-translationally modified thiopeptide remains poorly understood. Here, we report that NosK an alpha/beta-hydrolase fold protein, mediates the transfer of indolyl from NosJ, a discrete thiolation protein, to a linear pentathiazolyl peptide intermediate rather than its genetically encoded untreated precursor. This intermediate results from enzymatic processing of the peptide precursor, in which five of the six L-Cys residues are transformed into thiazoles but Cys4 selectively remains unmodified for indolyl substitution via a thioester exchange. Determining the timing of indolyl incorporation, which expands the chemical space of a thiopeptide framework, facilitates mechanistic access to the unusual logic of post-translational modifications in the biosynthesis of nosiheptide-type thiopeptide members that share a similar compact side-ring system.