Fungi are traditionally considered as reservoir of biologically active natural products. However, an active secondary metabolism has long not been attributed to early diverging fungi such asMortierella spec. Here, we report on the biosynthesis of two series of cyclic pentapeptides, the malpicyclins and malpibaldins, as products ofMortierella alpinaATCC32222. The molecular structures of malpicyclins were elucidated by HR-MS/MS, Marfey’s method, and 1D and 2D NMR spectroscopy. In addition, malpibaldin biosynthesis was confirmed by HR-MS. Genome mining and comparative qRT-PCR expression analysis pointed at two pentamodular nonribosomal peptide synthetases (NRPS), malpicyclin synthetase MpcA and malpibaldin synthetase MpbA, as candidate biosynthetic enzymes. Heterologous production of the respective adenylation domains and substrate specificity assays proved promiscuous substrate selection and confirmed their respective biosynthetic roles. In stark contrast to known fungal NRPSs, MpbA and MpcA contain bacterial-like dual epimerase/condensation domains allowing the racemization of enzyme-tetheredl-amino acids and the subsequent incorporation ofd-amino acids into the metabolites. Phylogenetic analyses of both NRPS genes indicate a bacterial origin and a horizontal gene transfer into the fungal genome. This is the first report of nonribosomal peptide biosynthesis in basal fungi which highlights this paraphylum as novel and underrated resource of natural products.IMPORTANCEFungal natural compounds are industrially produced with application in antibiotic treatment, cancer medications and crop plant protection. Traditionally, higher fungi have been intensively investigated concerning their metabolic potential, but re-identification of already known compounds is frequently observed. Hence, alternative strategies to acquire novel bioactive molecules are required. We present the genusMortierellaas representative of the early diverging fungi as an underestimated resource of natural products.Mortierella alpinaproduces two families of cyclopeptides, denoted malpicyclins and malpibaldins, respectively, via two pentamodular nonribosomal peptide synthetases (NRPSs). These enzymes are much closer related to bacterial than to other fungal NRPSs, suggesting a bacterial origin of these NRPS genes inMortierella. Both enzymes are the first biochemically characterized natural product biosynthesis enzymes of basal fungi. Hence, this report establishes early diverging fungi as prolific natural compound producers and sheds light on the origin of their biosynthetic capacity.