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Summary: Antibiotic resistance is reaching alarming levels, demanding for the discovery and development of antibiotics with novel chemistry and mechanisms of action. The recently discovered antibiotic cacaoidin combines the characteristic lanthionine residue of lanthipeptides and the linaridin-specific N-terminal dimethylation in an unprecedented N-dimethyl lanthionine ring, being therefore designated as the first class V lanthipeptide (lanthidin). Further notable features include the high D-amino acid content and a unique disaccharide substitution attached to the tyrosine residue. Cacaoidin shows antimicrobial activity against gram-positive pathogens and was shown to interfere with peptidoglycan biosynthesis. Initial investigations indicated an interaction with the peptidoglycan precursor lipid IIPGN as described for several lanthipeptides. Using a combination of biochemical and molecular interaction studies we provide evidence that cacaoidin is the first natural product demonstrated to exhibit a dual mode of action combining binding to lipid IIPGN and direct inhibition of cell wall transglycosylases.