Bacterial trans‐acyltransferase polyketide synthases (trans‐AT PKSs) are modular megaenzymes that employ unusual catalytic domains to assemble diverse bioactive natural products. One such PKS is responsible for the biosynthesis of the oximidine anticancer agents, oxime‐substituted benzolactone enamides that inhibit vacuolar H+‐ATPases. Here, we describe the identification of the oximidine gene cluster in Pseudomonas baetica and the characterization of four novel oximidine variants, including a structurally simpler intermediate that retains potent anticancer activity. Using a combination of in vivo, in vitro and computational approaches, we experimentally elucidate the oximidine biosynthetic pathway and reveal an unprecedented mechanism for O‐methyloxime formation. We show that this process involves a specialized monooxygenase and methyltransferase domain and provide insight into their activity, mechanism and specificity. Our findings expand the catalytic capabilities of trans‐AT PKSs and identify potential strategies for the production of novel oximidine analogues. The anticancer agent oximidine I and three novel variants were discovered as products of a cryptic trans‐AT PKS/NRPS in Pseudomonas baetica. By manipulating the biosynthetic pathway, a key intermediate was identified that retains potent anticancer properties. A combination of bioinformatics analysis and genetic and biochemical experiments illuminated the oximidine biosynthetic pathway, including a novel mechanism for O‐methyloxime formation.