We identified the par biosynthetic gene cluster from Paraphaeosphaeria sp. C-XB-J-1, responsible for producing epoxycyclohexenone (ECH)-containing meroterpenoids, paraphaeones. In vitro reconstitution revealed the sequential action of the cupin-domain protein ParE and the SDR enzyme ParD in ECH formation. Molecular dynamics analysis and site-directed mutagenesis confirmed critical catalytic residues. This work provides the biochemical evidence for a fungal cupin epoxidase involved in ECH biosynthesis and expands the enzymology of fungal meroterpenoid.