Carbapenems are a clinically important antibiotic family. More than 50 naturally occurring carbapenam/ems are known and are distinguished primarily by their C-2/C-6 side chains where many are only differentiated by the oxidation states of these substituents. With a limited palette of variations the carbapenem family comprises a natural combinatorial library, and C-2/C-6 oxidation is associated with increased efficacy. We demonstrate that ThnG and ThnQ encoded by the thienamycin gene cluster in Streptomyces cattleya oxidize the C-2 and C-6 moieties of carbapenems, respectively. ThnQ stereospecifically hydroxylates PS-5 (5) giving N-acetyl thienamycin (2). ThnG catalyzes sequential desaturation and sulfoxidation of PS-5 (5), giving PS-7 (7) and its sulfoxide (9). The enzymes are relatively Substrate selective but are proposed to give rise to the oxidative diversity of carbapenems produced by S. cattleya, and orthologues likely function similarly in allied streptomyces. Elucidating the roles of ThnG and ThnQ will focus further investigations of carbapenem antibiotic biosynthesis.