Polyketide synthases (PKSs) are involved in the biosynthesis of many important natural products. In bacteria, type III PKSs typically catalyze iterative decarboxylation and condensation reactions of malonyl-CoA building blocks in the biosynthesis of polyhydroxyaromatic products. Here it is shown that Gcs, a type III PKS encoded by the sco7221 ORF of the bacterium Streptomyces coelicolor, is required for biosynthesis of the germicidin family of 3,6-dialkyl-4-hydroxypyran-2-one natural products. Evidence consistent with Gcs-catalyzed elongation of specific beta-ketoacyl-ACP products of the fatty acid synthase FabH with ethyl- or methylmalonyl-CoA in the biosynthesis of germicidins is presented. Selectivity for beta-ketoacyl-ACP starter units and ethylmalonyl-CoA as an extender unit is unprecedented for type III PKSs, suggesting these enzymes may be capable of utilizing a far wider range of starter and extender units for natural product assembly than believed until now.