A simplified model system composed of a NADPH-dependent flavoprotein hydroxylase PgaE and a short-chain alcohol dehydrogenase/reductase (SDR) CabV was used to dissect a multistep angucycline modification redox cascade into several subreactions in vitro. We demonstrate that the two enzymes are sufficient for the conversion of angucycline substrate 2,3-dehydro-UWM6 to gaudimycin C. The flavoenzyme PgaE is shown to be responsible for two consecutive NADPH- and O(2)-dependent reactions, consistent with the enzyme-catalyzed incorporation of oxygen atoms at C-12 and C-12b in gaudimycin C. The two reactions do not significantly overlap, and the second catalytic cycle is initiated only after the original substrate 2,3-dehydro-UWM6 is nearly depleted. This allowed us to isolate the product of the first reaction at limiting NADPH concentrations and allowed the study of the qualitative and kinetic properties of the separated reactions. Dissection of the reaction cascade also allowed us to establish that the SDR reductase CabV catalyzes the final biosynthetic step, which is closely coupled to the second PgaE reaction. In the absence of CabV, the complete PgaE reaction leads invariably to product degradation, whereas in its presence, the reaction yields the final product, gaudimycin C. The result implies that the C-6 ketoreduction step catalyzed by CabV is required for stabilization of a reactive intermediate. The close relationship between PgaE and CabV would explain previous in vivo observations: why the absence of a reductase gene may result in the lack of C-12b-oxygenated species and, vice versa, why all C-12b-oxygenated angucyclines appear to have undergone reduction at position C-6.