The complex bis-spiroacetal polyether ionophore salinomycin has been identified as a uniquely selective agent against cancer stem cells and is also strikingly effective in an animal model of latent tuberculosis. The basis for these important activities is unknown. We show here that deletion of the salE gene abolishes salinomycin production and yields two new analogues, in both of which the C18C19 cis double bond is replaced by a hydroxy group stereospecifically located at C19, but which differ from each other in the configuration of the bis-spiroacetal. These results identify SalE as a novel dehydratase and demonstrate that biosynthetic engineering can be used to redirect the reaction cascade of oxidative cyclization to yield new salinomycin analogues for use in mechanism-of-action studies.