Lanthipeptides are ribosomally synthesized and post-translationally modified peptides characterized by lanthionine (Lan) and/or methyllanthionine (MeLan) residues. Four classes of enzymes have been identified to install these structures in a substrate peptide. Recently, a novel class of lanthipeptides was discovered that lack genes for known class I–IV lanthionine synthases in their biosynthetic gene cluster (BGC). In this study, the dehydration of Ser/Thr during the biosynthesis of the class V lanthipeptide cacaoidin was reconstituted in vitro . The aminoglycoside phosphotransferase-like enzyme CaoK iteratively phosphorylates Ser/Thr residues on the precursor peptide CaoA, followed by phosphate elimination catalyzed by the HopA1 effector-like protein CaoY to achieve eight successive dehydrations. CaoY shows sequence similarity to the OspF family proteins and the lyase domains of class III/IV lanthionine synthetases, and mutagenesis studies identified residues that are critical for catalysis. An AlphaFold prediction of the structure of the dehydration enzyme complex engaged with its substrate suggests the importance of hydrophobic interactions between the CaoA leader peptide and CaoK in enzyme–substrate recognition. This model is supported by site-directed mutagenesis studies.