Nonheme diiron monooxygenases make up a rapidly growing family of oxygenases that are rarely identified in secondary metabolism. Herein, we report the in vivo, in vitro, and structural characterizations of a nonheme diiron monooxygenase, PtmU3, that installs a C-5 β-hydroxyl group in the unified biosynthesis of platensimycin and platencin, two highly functionalized diterpenoids that act as potent and selective inhibitors of bacterial and mammalian fatty acid synthases. This hydroxylation sets the stage for the subsequent A-ring cleavage step key to the unique diterpene-derived scaffolds of platensimycin and platencin. PtmU3 adopts an unprecedented triosephosphate isomerase (TIM) barrel structural fold for this class of enzymes and possesses a noncanonical diiron active site architecture with a saturated six-coordinate iron center lacking a μ-oxo bridge. This study reveals the first member of a previously unidentified superfamily of TIM-barrel-fold enzymes for metal-dependent dioxygen activation, with the majority predicted to act on CoA-linked substrates, thus expanding our knowledge of nature’s repertoire of nonheme diiron monooxygenases and TIM-barrel-fold enzymes.