Ergothioneine is a histidine thiol derivative. Its mycobacterial biosynthetic pathway has five steps (EgtA-E catalysis) with two novel reactions: a mononuclear nonheme iron enzyme (EgtB) catalyzed oxidative C-S bond formation and a PLP-mediated C-S lyase (EgtE) reaction. Our bioinformatic and biochemical analyses indicate that the fungus Neurospora crassa has a more concise ergothioneine biosynthetic pathway because its nonheme iron enzyme, Egt1, makes use of cysteine instead of γ-Glu-Cys as the substrate. Such a change of substrate preference eliminates the competition between ergothioneine and glutathione biosyntheses. In addition, we have identified the N. crassa C-S lyase (NCU11365) and reconstituted its activity in vitro, which makes the future ergothioneine production through metabolic engineering feasible.