Nematophin, a known antibiotic natural product against Staphylococcus aureus for almost 20 years, is produced by all strains of Xenorhabdus nematophila. Despite its simple structure, its biosynthesis was unknown. Its biosynthetic pathway is reported using heterologous production in Escherichia coli. Additionally, the identification, structure elucidation, and biosynthesis of six extended nematophin derivatives from Xenorhabdus PB62.4 carrying an additional valine are reported. Preliminary bioactivity studies suggest a biological role of these compounds in the bacteria-nematode-insect symbiosis.