Incubation of recombinant module 2 of the polyether nanchangmycin synthase (NANS), carrying an appended thioesterase domain, with the ACP-bound substrate (2RS)-2-methyl-3-ketobutyryl-NANS_ACP1 (2-ACP1) and methylmalonyl-CoA in the presence of NADPH gave diastereomerically pure (2S,4R)-2,4-dimethyl-5-ketohexanoic acid (4a). These results contrast with the previously reported weak discrimination by NANS module 2+TE between the enantiomers of the corresponding N-acetylcysteamine-conjugated substrate analogue (±)-2-methyl-3-ketobutyryl-SNAC (2-SNAC), which resulted in formation of a 5:3 mixture of 4a and its (2S,4S)-diastereomer 4b. Incubation of NANS module 2+TE with 2-ACP1 in the absence of NADPH gave unreduced 3,5,6-trimethyl-4-hydroxypyrone (3) with a kcat of 4.4 ± 0.9 min–1 and a kcat/Km of 67 min–1 mM–1, corresponding to a ∼2300-fold increase compared to the kcat/Km for the diffusive substrate 2-SNAC. Covalent tethering of the 2-methyl-3-ketobutyryl thioester substrate to the NANS ACP1 domain derived from the natural upstream PKS module of the nanchangmycin synthase significantly enhanced both the stereospecificity and the kinetic efficiency of the sequential polyketide chain translocation and condensation reactions catalyzed by the ketosynthase domain of NANS module 2.