Syringolins are a class of cyclic tripeptide natural products that are potent and irreversible inhibitors of the eukaryotic proteasome. In addition to being hybrid NRPS/PKS molecules, they also feature an unusual ureido-linkage (red) between two amino acid monomers. Here we report the first in vitro characterization of enzymatic ureido-linkage formation which is catalyzed by an NRPS, SylC. Using C-13- and O-18-labeling studies, we show that biosynthesis occurs via N-carboxylation to form an initial N-carboxy-aminoacyl-S-Ppant enzyme intermediate which undergoes intramolecular cyclization followed by condensation with a second amino acid to form the ureido-containing dipeptide product.