Neocarzinostatin, a clinical anticancer drug, is the archetypal member of the chromoprotein family of enediyne antitumor antibiotics that are composed of a nonprotein chromophore and an apoprotein. The neocarzinostatin chromophore consists of a nine-membered enediyne core, a deoxyaminosugar, and a naphthoic acid moiety. We have previously cloned and sequenced the neocarzinostatin biosynthetic gene cluster and proposed that the biosynthesis of the naphthoic acid moiety and its incorporation into the neocarzinostatin chromophore are catalyzed by five enzymes NcsB, NcsB1, NcsB2, NcsB3, and NcsB4. Here we report the biochemical characterization of NcsB1, unveiling that: (i) NcsB1 is an S-adenosyl-L-methionine-dependent O-methyltransferase; (ii) NcsB1 catalyzes regiospecific methylation at the 7-hydroxy group of its native substrate, 2,7-dihydroxy-5-methyl-1-naphthoic acid; (iii) NcsB1 also recognizes other dihydroxynaphthoic acids as substrates and catalyzes regiospecific O-methylation; and (iv) the carboxylate and its ortho-hydroxy groups of the substrate appear to be crucial for NcsB1 substrate recognition and binding, and O-methylation takes place only at the free hydroxy group of these dihydroxynaphthoic acids. These findings establish that NcsB1 catalyzes the third step in the biosynthesis of the naphthoic acid moiety of the neocarzinostatin chromophore and further support the early proposal for the biosynthesis of the naphthoic acid and its incorporation into the neocarzinostatin chromophore with free naphthoic acids serving as intermediates. NcsB1 represents another opportunity that can now be exploited to produce novel neocarzinostatin analogs by engineering neocarzinostatin biosynthesis or applying directed biosynthesis strategies.