Isoquinolinequinones represent an important family of natural alkaloids with profound biological activities. Heterologous expression of a rare bifunctional indole prenyltransferase/tryptophan indole-lyase enzyme from Streptomyces mirabilis P8-A2 in S. albidoflavus J1074 led to the activation of a putative isoquinolinequinone biosynthetic gene cluster and production of a novel isoquinolinequinone alkaloid, named maramycin (1). The structure of maramycin was determined by analysis of spectroscopic (1D/2D NMR) and MS spectrometric data. The prevalence of this bifunctional biosynthetic enzyme was explored and found to be a recent evolutionary event with only a few representatives in nature. Maramycin exhibited moderate cytotoxicity against human prostate cancer cell lines, LNCaP and C4-2B. The discovery of maramycin (1) enriched the chemical diversity of natural isoquinolinequinones and also provided new insights into crosstalk between the host biosynthetic genes and the heterologous biosynthetic genes in generating new chemical scaffolds.