Cyclodipeptide synthases (CDPSs) catalyze the formation of cyclodipeptides using aminoacylated tRNAs as the substrates and have great potential in the production of diverse 2,5-diketopiperazines (2,5-DKPs). Genome mining of NRRL B-24963 revealed a two-gene locus, , encoding CDPS SazA and a unique fused enzyme (SazB) harboring two domains: phytoene synthase-like prenyltransferase (PT) and methyltransferase (MT). Heterologous expression of the gene(s) in J1074 led to the production of four prenylated indole alkaloids, among which streptoazines A to C (compounds 3 to 5) are new compounds. Expression of different gene combinations showed that the SazA catalyzes the formation of (l-Trp-l-Trp) (cWW; compound 1), followed by consecutive prenylation and methylation by SazB. Biochemical assays demonstrated that SazB is a bifunctional enzyme, catalyzing sequential C-3/C-3' prenylation(s) by SazB-PT and N-1/N-1' methylation(s) by SazB-MT. Of note, the substrate selectivity of SazB-PT and SazB-MT was probed, revealing the stringent specificity of SazB-PT but relative flexibility of SazB-MT. Natural products with a 2,5-diketopiperazine (2,5-DKP) skeleton have long sparked interest in drug discovery and development. Recent advances in microbial genome sequencing have revealed that the potential of cyclodipeptide synthase (CDPS)-dependent pathways encoding new 2,5-DKPs are underexplored. In this study, we report the genome mining of a new CDPS-encoding two-gene operon and activation of this cryptic gene cluster through heterologous expression, leading to the discovery of four indole 2,5-DKP alkaloids. The (l-Trp-l-Trp) (cWW)-synthesizing CDPS SazA and the unusual prenyltransferase (PT)-methyltransferase (MT) fused enzyme SazB were characterized. Our results expand the repertoire of CDPSs and associated tailoring enzymes, setting the stage for accessing diverse prenylated alkaloids using synthetic biology strategies.