Lantibiotics are ribosomally synthesized and post-translationally modified antimicrobial peptides containing thioether rings. In addition to these cross-links, the clinical candidate lantibiotic NAI-107 also possesses a C-terminal S-[(Z)-2-aminovinyl]-d-cysteine (AviCys) and a unique 5-chloro-l-tryptophan (ClTrp) moiety linked to its potent bioactivity. Bioinformatic and genetic analyses on the NAI-107 biosynthetic gene cluster identified mibH and mibD as genes encoding flavoenzymes responsible for the formation of ClTrp and AviCys, respectively. The biochemical basis for the installation of these modifications on NAI-107 and the substrate specificity of either enzyme is currently unknown. Using a combination of mass spectrometry, liquid chromatography, and bioinformatic analyses, we demonstrate that MibD is an FAD-dependent Cys decarboxylase and that MibH is an FADH2-dependent Trp halogenase. Most FADH2-dependent Trp halogenases halogenate free Trp, but MibH was only active when Trp was embedded within its cognate peptide substrate deschloro NAI-107. Structural comparison of the 1.88-Å resolution crystal structure of MibH with other flavin-dependent Trp halogenases revealed that subtle amino acid differences within the MibH substrate binding site generates a solvent exposed crevice presumably involved in determining the substrate specificity of this unusual peptide halogenase.