We uncovered the biosynthetic pathway of the C-glycosylated depside arenicolin B from Phialomyces arenicola through genome mining, heterologous reconstitution and biochemical characterization. The biosynthetic gene cluster (BGC) of arenicolin B is comprised of a HRPKS, a NRPKS, and a C-glycosyltransferase. Through biochemical dissection and evaluation, we demonstrate the NRPKS thioesterase (TE) domain catalyzes depside formation.