Indole diterpenes are a large, structurally and functionally diverse group of secondary metabolites produced by filamentous fungi. Biosynthetic schemes have been proposed for these metabolites but until recently none of the proposed steps had been validated by biochemical or genetic studies. Using Penicillium paxilli as a model experimental system to study indole diterpene biosynthesis we previously showed by deletion analysis that a cluster of seven genes is required for paxilline biosynthesis. Two of these pax genes, paxP and paxQ (encoding cytochrome P450 monooxygenases), are required in the later steps in this pathway. Here, we describe the function of paxP and paxQ gene products by feeding proposed paxilline intermediates to strains lacking the pax cluster but containing ectopically integrated copies of paxP or paxQ. Transformants containing paxP converted paspaline into 13-desoxypaxilline as the major product and -PC-M6 as the minor product. -PC-M6, but not ␣-PC-M6, was also a substrate for PaxP and was converted to 13-desoxypaxilline. paxQ-containing transformants converted 13-desoxypaxilline into paxilline. These results confirm that paspaline, -PC-M6, and 13-desoxypaxilline are paxilline intermediates and that paspaline and -PC-M6 are substrates for PaxP, and 13-desoxypaxilline is a substrate for PaxQ. PaxP and PaxQ also utilized -paxitriol and ␣-PC-M6 as substrates converting them to paxilline and ␣-paxitriol, respectively. These findings have allowed us to delineate clearly the biosynthetic pathway for paxilline for the first time.