Selenium is an essential micronutrient in diverse organisms. Two routes are known for its insertion into proteins and nucleic acids, via selenocysteine and 2-selenouridine, respectively. However, despite its importance, pathways for specific incorporation of selenium into small molecules have remained elusive. Here we use a genome-mining strategy in various microorganisms to uncover a widespread three-gene cluster that encodes a dedicated pathway for producing selenoneine, the selenium analogue of the multifunctional molecule ergothioneine. We elucidate the reactions of all three proteins and uncover two novel selenium-carbon bond-forming enzymes and the biosynthetic pathway for production of a selenosugar, which is an unexpected intermediate en route to the final product. Our findings expand the scope of biological selenium utilization, suggest that the selenometabolome is more diverse than previously thought, and set the stage for the discovery of other selenium-containing natural products.