The preparation of protein-protein, protein-peptide, and protein-small molecule conjugates is important for a variety of applications, such as vaccine production, immunotherapies, preparation of antibody-drug conjugates, and targeted delivery of therapeutics. To achieve site-selective conjugation, selective chemical or enzymatic functionalization of proteins is required. We have recently reported biosynthetic pathways in which small, catalytic scaffold peptides are utilized for the generation of amino acid-derived natural products called pearlins. In these systems, peptide amino-acyl tRNA ligases (PEARLs) append amino acids to the C-terminus of a scaffold peptide, and tailoring enzymes encoded in the biosynthetic gene clusters modify the PEARL-appended amino acid to generate a variety of natural products. Herein, we investigate the substrate selectivity of one such tailoring enzyme, BhaC1, that participates in pyrroloiminoquinone biosynthesis. BhaC1 converts the indole of a C-terminal tryptophan into an o-hydroxy-p-quinone, a promising moiety for site-selective bioconjugation. Our studies demonstrate that BhaC1 requires a 20-amino acid peptide for substrate recognition. When this peptide was appended at the C-terminus of proteins, the C-terminal Trp was modified by BhaC1. The enzyme is sufficiently selective that only small changes to the sequence of the peptide are tolerated. An AlphaFold model for substrate recognition explains the selectivity of the enzyme, which may be used to install a reactive handle onto the C-terminus of proteins.