Serine carboxypeptidase-like (SCPL) proteins have recently emerged as a new group of plant acyltransferases. These enzymes share homology with peptidases but lack protease activity and instead are able to acylate natural products. Several SCPL acyltransferases have been characterized to date from dicots, including an enzyme required for the synthesis of glucose polyesters that may contribute to insect resistance in wild tomato (Solanum pennellii) and enzymes required for the synthesis of sinapate esters associated with UV protection in Arabidopsis thaliana. In our earlier genetic analysis, we identified the Saponin-deficient 7 (Sad7) locus as being required for the synthesis of antimicrobial triterpene glycosides (avenacins) and for broad-spectrum disease resistance in diploid oat (Avena strigosa). Here, we report on the cloning of Sad7 and show that this gene encodes a functional SCPL acyltransferase, SCPL1, that is able to catalyze the synthesis of both N-methyl anthraniloyl- and benzoyl-derivatized forms of avenacin. Sad7 forms part of an operon-like gene cluster for avenacin synthesis. Oat SCPL1 (SAD7) is the founder member of a subfamily of monocot-specific SCPL proteins that includes predicted proteins from rice (Oryza sativa) and other grasses with potential roles in secondary metabolism and plant defense.