Baeyer-Villiger monooxygenases (BVMOs) play crucial roles in the core-structure modification of natural products. They catalyze lactone formation by selective oxygen insertion into a carbon-carbon bond adjacent to a carbonyl group (Baeyer-Villiger oxidation, BVO). The homologous bacterial BVMOs, BraC and PxaB, thereby process bicyclic dihydroindolizinone substrates originating from a bimodular nonribosomal peptide synthetase (BraB or PxaA). While both enzymes initially catalyze the formation of oxazepine-dione intermediates following the identical mechanism, the final natural product spectrum diverges. For the pathway involving BraC, the exclusive formation of lipocyclocarbamates, the brabantamides, was reported. The pathway utilizing PxaB solely produces pyrrolizidine alkaloids, the pyrrolizixenamides. Surprisingly, replacing pxaB within the pyrrolizixenamide biosynthetic pathway by braC does not change the product spectrum to brabantamides. Factors controlling this product selectivity have remained elusive. In this study, we set out to solve this puzzle by combining the total synthesis of crucial pathway intermediates and anticipated products with in-depth functional in vitro studies on both recombinant BVMOs. This work shows that the joint oxazepine-dione intermediate initially formed by both BVMOs leads to pyrrolizixenamides upon nonenzymatic hydrolysis, decarboxylative ring contraction, and dehydration. Brabantamide biosynthesis is enzyme-controlled, with BraC efficiently transforming all the accepted substrates into its cognate final product scaffold. PxaB, in contrast, shows only considerable activity toward brabantamide formation for the substrate analog with a natural brabantamide-type side chain structure, revealing substrate-controlled product selectivity.