Tetrahydropyran rings are a common feature of complex polyketide natural products, but much remains to be learned about the enzymology of their formation. The enzyme SalBIII from the salinomycin biosynthetic pathway resembles other polyether epoxide hydrolases/cyclases of the MonB family, but SalBIII plays no role in the conventional cascade of ring opening/closing. Mutation in the salBIII gene gave a metabolite in which ring A is not formed. Using this metabolite in vitro as a substrate analogue, SalBIII has been shown to form pyran ring A. We have determined the X-ray crystal structure of SalBIII, and structure-guided mutagenesis of putative active-site residues has identified Asp38 and Asp104 as an essential catalytic dyad. The demonstrated pyran synthase activity of SalBIII further extends the impressive catalytic versatility of α+β barrel fold proteins.