Previous studies of the biosynthetic enzymes involved in the assembly of scytonemin (1), a cyanobacterial sunscreen, have identified beta-ketoacid 2 as an important intermediate that is produced by ThDP-dependent enzyme ScyA. We now report that ScyC, previously annotated as a hypothetical protein, catalyzes cyclization and decarboxylation of 2 to generate ketone 5. Assembly of the cyclopentyl[b]indole structure in this manner has little precedent in the chemical literature. Additional mechanistic experiments have revealed that cyclization likely precedes decarboxylation and that the latter event may provide a driving force for cyclopentane formation.