Natural products have continued to serve as an important source for therapeutic compounds, as well as inspirational targets for synthetic chemists. Filamentous fungi have historically been a rich source for bioactive natural products, especially those of polyketide and/or terpenoids origins. Meroterpenoids are natural products of mixed biosynthetic origin with part of the molecules derived from terpenoids. A majority (>80%) of the fungal meroterpenoids are the polyketide-terpenoids, which include a number of medicinally relevant compounds. Understand the biosynthesis of this large family of meroterpenoid natural products can not only contribute to our basic knowledge of enzyme catalysis and biosynthesis, but also increase our abilities to perform genome mining studies on the exponentially accumulating fungal genome sequences. Fumagillin, produced by the pathogenic Aspergillus fumigatus, is among the most well-known fungal metabolites, yet the genetic basis of the biosynthesis has been puzzling. We will present the identification and verification of the fma gene cluster, and characterization of the polyketide synthase and acyltransferase involved in biosynthesis of the dioic acid portion. More significantly, we identified the elusive β-trans-bergamotene synthase as a membrane-bound terpene cyclase. An oxidative pathway that transforms β-trans-bergamotene into fumagillol will also be presented.