An intriguing mystery about tryptophan 2,3-dioxygenase is its hydrogen peroxide-triggered enzyme reactivation from the resting ferric oxidation state to the catalytically active ferrous form. In this study, we found that such an odd Fe(III) reduction by an oxidant depends on the presence of L-Trp, which ultimately serves as the reductant for the enzyme. In the peroxide reaction with tryptophan 2,3-dioxygenase, a previously unknown catalase-like activity was detected. A ferryl species (δ = 0.055 mm/s and ΔE(Q) = 1.755 mm/s) and a protein-based free radical (g = 2.0028 and 1.72 millitesla linewidth) were characterized by Mössbauer and EPR spectroscopy, respectively. This is the first compound ES-type of ferryl intermediate from a heme-based dioxygenase characterized by EPR and Mössbauer spectroscopy. Density functional theory calculations revealed the contribution of secondary ligand sphere to the spectroscopic properties of the ferryl species. In the presence of L-Trp, the reactivation was demonstrated by enzyme assays and by various spectroscopic techniques. A Trp-Trp dimer and a monooxygenated L-Trp were both observed as the enzyme reactivation by-products by mass spectrometry. Together, these results lead to the unraveling of an over 60-year old mystery of peroxide reactivation mechanism. These results may shed light on how a metalloenzyme maintains its catalytic activity in an oxidizing environment.