Pahayokolides A-D are cytotoxic cyclic polypeptides produced by the freshwater cyanobacterium Lyngbya sp. strain 15-2 that possess an unusual β-amino acid, 3-amino-2,5,7,8-tetrahydroxy-10-methylundecanoic acid (Athmu). The absolute configuration of pahayokolides A-D was determined using advanced Marfey’s method. It was also confirmed that a pendant N-acetyl-N-methyl leucine moiety in pahayokolide A was absent in pahayokolides B and pahayokolides C-D were conformers of pahayokolide A. Feeding experiments indicated that the biosynthesis of the Athmu sidechain arises from leucine or α-ketoisovalerate, however could not be further extended by three rounds of condensation with malonate units. Putative four peptide and one unique polyketide synthetases in Lyngbya sp. strain 15-2 were identified by using a PCR method and degenerate primers derived from conserved core sequences of known NRPSs and PKSs. Identification of one unique KS domain conflicted with the logic rule that the long side chain of Athmu was assembled by three rounds of ketide extensions if PKSs were involved. A gene cluster (pah) encoding a peptide synthetase putatively producing pahayokolide was cloned, partially sequenced and characterized. Seven modules of the non-ribosomal peptide synthetase (NRPS) were identified. Ten additional opening reading frames (ORFs) were found, responsible for peptide resistance, transport and degradation. Although the predicted substrate specificities of NRPS agreed with the structure of pahayokolide A partially, the disagreement could be explained. However, no PKS gene was found in the pah gene cluster.