Curcuminoids, major components of the spice turmeric, are used as a traditional Asian medicine and a food additive. Curcumin, a representative curcuminoid, has received a great deal of attention because of its anti-inflammatory, anticarcinogenic, and antitumor activities. Here we report a novel type III polyketide synthase named curcuminoid synthase from Oryza sativa, which synthesizes bisdemethoxycurcumin via a unique mechanism from two 4-coumaroyl-CoAs and one malonyl-CoA. The reaction begins with the thioesterification of the thiol moiety of Cys-174 by a starter molecule, 4-coumaroyl-CoA. Decarboxylative condensation of the first extender substrate, malonyl-CoA, onto the thioester of 4-coumarate results in the formation of a diketide-CoA intermediate. Subsequent hydrolysis of the intermediate yields a beta-keto acid, which in turn acts as the second extender substrate. The beta-keto acid is then joined to the Cys-174-bound 4-coumarate by decarboxylative condensation to form bisdemethoxycurcumin. This reaction violates the traditional head-to-tail model of polyketide assembly; the growing diketide intermediate is hydrolyzed to a beta-keto acid that subsequently serves as the second extender to form curcuminoids. Curcuminoid synthase appears to be capable of the synthesis of not only diarylheptanoids but also gingerol analogues, because it synthesized cinnamoyl(hexanoyl)methane, a putative intermediate of gingerol, from cinnamoyl-CoA and 3-oxo-octanoic acid.