A bacterial flavin-containing monooxygenase (FMO), fused to phosphite dehydrogenase, has been used to explore its biocatalytic potential. The bifunctional biocatalyst could be expressed in high amounts in Escherichia coli and was able to oxidize indole and indole derivatives into a variety of indigo compounds. The monooxygenase also performs the sulfoxidation of a wide range of prochiral sulfides, showing moderate to good enantioselectivities in forming chiral sulfoxides.