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Drimane-type sesquiterpenoids (DMTs) are characterized by a distinctive 6/6 bicyclic skeleton comprising the A and B rings. While DMTs are commonly found in fungi and plants, their presence in bacteria has not been reported. Moreover, the biosynthetic pathways for DMTs have been primarily elucidated in fungi, with identified P450s only acting on the B ring. In this study, we isolated and characterized three bacterial DMTs, namely 3β-hydroxydrimenol (2), 2α-hydroxydrimenol (3), and 3-ketodrimenol (4), from Streptomyces clavuligerus. Through genome mining and heterologous expression, we identified a cav biosynthetic gene cluster responsible for the biosynthesis of DMTs 2–4, along with a P450, CavA, responsible for introducing the C-2 and C-3 hydroxy groups. Furthermore, the substrate scope of CavA revealed its ability to hydroxylate drimenol analogs. This discovery not only broadens the known chemical diversity of DMTs from bacteria, but also provides new insights into DMT biosynthesis in bacteria.