Organic molecules of life are built with diverse functional groups that enable biology by fine tuning intimate connections through time and space. As such, the discovery of new-to-nature functional groups can expand our understanding of the natural world and motivate new applications in biotechnology and biomedicine. Herein we report the genome-aided discovery of sulfenicin, a novel polyketide-nonribosomal peptide hybrid natural product from a marine Streptomyces bacterium bearing a unique acylsulfenic acid functionality. Through a series of heterologous biosynthesis, functional genetics, and enzymatic reconstitution experiments, we show that this previously described synthetic functional group is biologically assembled by a set of enzymes from both primary and secondary metabolism, including a novel flavin-dependent S-hydroxylase that hydroxylates the sulfur atom of a thiocarboxylic acid. While the sulfenicin biosynthetic gene cluster is presently without parallel in public databases, acylsulfenic acid-encoding enzymes are widely distributed in bacterial genomes, implying that this labile functional group may similarly have a broad distribution among specialized metabolites.