Prenylated stilbenoids synthesized in some legumes exhibit plant pathogen defense properties and pharmacological activities with potential benefits to human health. Despite their importance, the biosynthetic pathways of these compounds remain to be elucidated. Peanut (Arachis hypogaea) hairy root cultures produce a diverse array of prenylated stilbenoids upon treatment with elicitors. Using metabolic inhibitors of the plastidic and cytosolic isoprenoid biosynthetic pathways, we demonstrated that the prenyl moiety on the prenylated stilbenoids derives from a plastidic pathway. We further characterized, to our knowledge for the first time, a membrane-bound stilbenoid-specific prenyltransferase activity from the microsomal fraction of peanut hairy roots. This microsomal fraction-derived resveratrol 4-dimethylallyl transferase utilizes 3,3-dimethylallyl pyrophosphate as a prenyl donor and prenylates resveratrol to form arachidin-2. It also prenylates pinosylvin to chiricanine A and piceatannol to arachidin-5, a prenylated stilbenoid identified, to our knowledge, for the first time in this study. This prenyltransferase exhibits strict substrate specificity for stilbenoids and does not prenylate flavanone, flavone, or isoflavone backbones, even though it shares several common features with flavonoid-specific prenyltransferases.