Lasso peptides are a new class of ribosomally synthesized and post-translationally modified peptides and thus far are only isolated from proteo-and actinobacterial sources. Typically, lasso peptide biosynthetic gene clusters encode enzymes for biosynthesis and export but not for tailoring. Here, we describe the isolation of the novel lasso peptide paeninodin from the firmicute Paenibacillus dendritiformis C454 and reveal within its biosynthetic cluster a gene encoding a kinase, which we have characterized as a member of a new class of lasso peptide-tailoring kinases. By employing a wide variety of peptide substrates, it was shown that this novel type of kinase specifically phosphorylates the C-terminal serine residue while ignoring those located elsewhere. These experiments also reveal that no other recognition motif is needed for efficient enzymatic phosphorylation of the C-terminal serine. Furthermore, through comparison with homologous HPr kinases and subsequent mutational analysis, we confirmed the essential catalytic residues. Our study reveals how lasso peptides are chemically diversified and sets the foundation for rational engineering of these intriguing natural products.