Cyanobactins comprise a widespread group of peptide metabolites produced by cyanobacteria that are often diversified by post‐translational prenylation. Several enzymes have been identified in cyanobactin biosynthetic pathways that carry out chemically diverse prenylation reactions, representing a resource for the discovery of post‐translational alkylating agents. Here, genome mining was used to identify orphan cyanobactin prenyltransferases, leading to the isolation of tolypamide from the freshwater cyanobacterium Tolypothrix sp. The structure of tolypamide was confirmed by spectroscopic methods, degradation, and enzymatic total synthesis. Tolypamide is forward‐prenylated on a threonine residue, representing an unprecedented post‐translational modification. Biochemical characterization of the cognate enzyme TolF revealed a prenyltransferase with strict selectivity for forward O‐prenylation of serine or threonine but with relaxed substrate selectivity for flanking peptide sequences. Since cyanobactin pathways often exhibit exceptionally broad substrate tolerance, these enzymes represent robust tools for synthetic biology.