The highly selective oxidative halogenations by non-heme iron and α-ketoglutarate-dependent enzymes are key reactions in the biosynthesis of lipopeptides, and often bestow valuable bioactivity to the metabolites. Here we present the first biochemical characterization of a putative fatty acyl halogenase, HctB, which is found in the hectochlorin biosynthetic pathway of Lyngbya majuscula. Its unprecedented three-domain structure, which includes an acyl carrier protein domain, allows self-contained conversion of the covalently tethered hexanoyl substrate. Structural analysis of the native product by (13) C NMR reveals high regioselectivity but considerable catalytic promiscuity. This challenges the classification of HctB as a primary halogenase: along with the proposed dichlorination, HctB performs oxygenation and an unprecedented introduction of a vinyl-chloride moiety into the nonactivated carbon chain. The relaxed substrate specificity is discussed with reference to a molecular model of the enzyme-substrate complex. The results suggest that fatty acyl transformation at the metal center of HctB can bring about considerable structural diversity in the biosynthesis of lipopeptides.