Alkylresorcinol moieties of cannabinoids are derived from olivetolic acid (OLA), a polyketide metabolite. However, the polyketide synthase (PKS) responsible for OLA biosynthesis has not been identified. In the present study, a cDNA encoding a novel PKS, olivetol synthase (OLS), was cloned from Cannabis sativa. Recombinant OLS did not produce OLA, but synthesized olivetol, the decarboxylated form of OLA, as the major reaction product. Interestingly, it was also confirmed that the crude enzyme extracts from flowers and rapidly expanding leaves, the cannabinoid-producing tissues of C. sativa, also exhibited olivetol-producing activity, suggesting that the native OLS is functionally expressed in these tissues. The possibility that OLS could be involved in OLA biosynthesis was discussed based on its catalytic properties and expression profile.