The labdane-related diterpenoids (LRDs) are a large group of natural products with a broad range of biological activities. They are synthesized through two consecutive reactions catalyzed by class II and I diterpene synthases (DTSs). The structural complexity of LRDs mainly depends on the catalytic activity of class I DTSs, which catalyze the formation of bicyclic to pentacyclic LRDs, using as a substrate the catalytic product of class II DTSs. To date, the structural and mechanistic details for the biosynthesis of bicyclic LRDs skeletons catalyzed by class I DTSs remain unclear. This work presents the first X-ray crystal structure of an (E)-biformene synthase, LrdC, from the soil bacterium Streptomyces sp. strain K155. LrdC was identified as a part of an LRD cluster of five genes and was found to be a class I DTS that catalyzes the Mg2+-dependent synthesis of bicyclic LRD (E)-biformene by the dephosphorylation and rearrangement of normal copalyl pyrophosphate (CPP). Structural analysis of LrdC coupled with docking studies suggests that Phe189 prevents cyclization beyond the bicyclic LRD product through a strong stabilization of the allylic carbocation intermediate, while Tyr317 functions as a general base catalyst to deprotonate the CPP substrate. Structural comparisons of LrdC with homology models of bacterial bicyclic LRD-forming enzymes (CldD, RmnD and SclSS), as well as with the crystallographic structure of bacterial tetracyclic LRD ent-kaurene synthase (BjKS), provide further structural insights into the biosynthesis of bacterial LRD natural products.