Microcystins form a large family of small cyclic heptapeptides harbouring extensive modifications in amino acid residue composition and functional group chemistry. These peptide hepatotoxins contain a range of non-proteinogenic amino acids and unusual peptide bonds, and are typically N-methylated. They are synthesized on large enzyme complexes consisting of non-ribosomal peptide synthetases and polyketide synthases in a variety of distantly related cyanobacterial genera. Here we report a 1236 bp in-frame deletion mutation in the mcyA gene of the microcystin biosynthetic pathway in nine strains of the genus Anabaena. The deletion removed almost the entire N-methyltransferase (NMT) domain. Strains of Anabaena carrying the in-frame deletion mutation incorporated mainly dehydroalanine (Dha) into the microcystins they produce while strains with full-length mcyA genes incorporated mainly N-methyldehydroalanine (Mdha). Interestingly, the strains of Anabaena lacking the NMT domain also incorporated elevated amounts of L-Ser, the precursor of Mdha and Dha, into the microcystin they produced relative to strains carrying functional NMT domains. We provide evidence for the in-frame deletion of the NMT domain without the co-conversion of the flanking adenylation domain. Our results demonstrate a further example of the strategies employed by cyanobacteria in the biosynthesis of microcystin variants.