A cyclolavandulyl group is a C-10 monoterpene with a branched and cyclized carbon skeleton. This monoterpene is rarely found in nature, and its biosynthesis is poorly understood. To determine the biosynthesis mechanism of this monoterpene, we sequenced the genome of Streptomyces sp. CL190, which produces lavanducyanin, a phenazine with an N-linked cyclolavandulyl structure. Sequencing and homology searches identified one candidate gene product that consists of only a cis-isoprenyl diphosphate synthase domain. Disruption of the gene and biochemical analysis of the recombinant enzyme demonstrated that the enzyme synthesized a cyclolavandulyl diphosphate essential for the biosynthesis of lavanducyanin. This enzyme is an unprecedented terpene synthase that catalyzes both the condensation of the C-5 isoprene units and subsequent cyclization to form the cyclolavandulyl monoterpene structure.