Diacyl phthiocerol esters and their congeners are mycobacterial virulence factors. The biosynthesis of these complex lipids remains poorly understood. Insight into their biosynthesis will aid the development of rationally designed drugs that inhibit their production. In this study, we investigate a biosynthetic step required for diacyl (phenol)phthiocerol ester production, i.e., the reduction of the keto group of (phenol)phthiodiolones. We utilized comparative genomics to identify phthiodiolone ketoreductase gene candidates and provide a genetic analysis demonstrating gene function for two of these candidates. Moreover, we present data confirming the existence of a diacyl phthiotriol intermediate in diacyl phthiocerol biosynthesis. We also elucidate the mechanism underlying diacyl phthiocerol deficiency in some mycobacteria, such as Mycobacterium ulcerans and Mycobacterium kansasii. Overall, our findings shed additional light on the biosynthesis of an important group of mycobacterial lipids involved in virulence.