Lasso peptides belong to the class of ribosomally synthesized and post-translationally modified peptides. Their common distinguishing feature is an N-terminal macrolactam ring that is threaded by the C-terminal tail. This lasso fold is maintained through steric interactions. The isolation and characterization of xanthomonins I-III, the first lasso peptides featuring macrolactam rings consisting of only seven amino acids, is now presented. The crystal structure of xanthomonin I and the NMR structure of xanthomonin II were also determined. A total of 25 variants of xanthomonin II were generated to probe different aspects of the biosynthesis, stability, and fold maintenance. These mutational studies reveal the limits such a small ring imposes on the threading and show that every plug amino acid larger than serine is able to maintain a heat-stable lasso fold in the xanthomonin II scaffold.