Horizontal transfer of genes is widespread among prokaryotes, but is less common between microorganisms and animals. Here, we present evidence for the presence of a gene encoding functional isopenicillin N synthase, an enzyme in the β-lactam antibiotics biosynthesis pathway, in the genome of the soil-living collembolan species,Folsomia candida(FcIPNS). At present, this gene is only known from bacteria and fungi, as is the capacity to produce β-lactam antibiotics. TheFcIPNSgene was located on two genomic contigs, was physically linked to a predicted insect ATP-binding cassette transporter gene, and contained three introns each flanked by eukaryotic splicing recognition sites (GT/AG). Homology searches revealed no similarity between these introns and theFcIPNSregions of bacteria or fungi. All amino acids conserved across bacteria and fungi were also conserved inF. candida.RecombinantFcIPNSwas able to convert its substrate amino δ-(l-α-aminoadipyl)–l-cysteinyl–d-valine into isopenicillin N, providing strong evidence that FcIPNS is functional. Phylogenetic analysis clustered FcIPNS outside the bacterial IPNS clade, and also outside the fungal IPNS clade, suggesting an ancient gene transfer followed by divergence in theF. candidagenome. In conclusion, the data suggest that the soil-living collembolanF. candidahas assimilated the capacity for antibacterial activity by horizontal gene transfer, which may be an important adaptive trait in the microbe-dominated soil ecosystem.