The marine globin dehaloperoxidase-hemoglobin (DHP) from Amphitrite ornata was found to catalyze the H2O2-dependent oxidation of monohaloindoles, a previously unknown class of substrate for DHP. Using 5-Br-indole as a representative substrate, the major monooxygenated products were found to be 5-Br-2-oxindole and 5-Br-3-oxindolenine. Isotope labeling studies confirmed that the oxygen atom incorporated was derived exclusively from H2O2, indicative of a previously unreported peroxygenase activity for DHP. Peroxygenase activity could be initiated from either the ferric or oxyferrous states with equivalent substrate conversion and product distribution. It was found that 5-Br-3-oxindole, a precursor of the product 5-Br-3-oxindolenine, readily reduced the ferric enzyme to the oxyferrous state, demonstrating an unusual product-driven reduction of the enzyme. As such, DHP returns to the globin-active oxyferrous form after peroxygenase activity ceases. Reactivity with 5-Br-3-oxindole in the absence of H2O2 also yielded 5,5'-Br2-indigo above the expected reaction stoichiometry under aerobic conditions, and O2-concentration studies demonstrated dioxygen consumption. Nonenzymatic and anaerobic controls both confirmed the requirements for DHP and molecular oxygen in the catalytic generation of 5,5'-Br2-indigo, and together suggest a newly identified oxidase activity for DHP.