Cyanobacteria are abundant producers of natural products well recognized for their bioactivity and utility in drug discovery and biotechnology applications. In the last decade, characterization of several modular gene clusters that code for the biosynthesis of these compounds has revealed a number of unusual enzymatic reactions. In this article, we review several mechanistic transformations identified in marine cyanobacterial biosynthetic pathways, with an emphasis on modular polyketide synthase(PKS)/non-ribosomal peptide synthetase (NRPS) gene clusters. In selected instances, we also make comparisons between cyanobacterial gene clusters derived from marine and freshwater strains. We then provide an overview of recent developments in cyanobacterial natural products biosynthesis made available through genome sequencing and new advances in bioinformatics and genetics.