The sulfoxide synthase EgtB represents a unique family of nonheme iron enzymes that catalyze the formation of a C-S bond between N-α-trimethyl histidine and γ-glutamyl cysteine, which is the key step in the biosynthesis of ergothioneine, an important amino acid related to aging. A controversy has arisen regarding its catalytic mechanism related to the function of the active-site Tyr377 residue. The biosynthesis of ergothioneine in EgtB shows structural similarities to cysteine dioxygenase which transfers two oxygen atoms to the thiolate group of cysteine. The question, therefore, is how do EgtB enzymes catalyze the C-S bond-formation reaction, while also preventing a dioxygenation of its cysteinate substrate? In this work we present a quantum mechanics/molecular mechanics study into the mechanism of sulfoxide synthase enzymes as compared to cysteine dioxygenase enzymes and present pathways for both reaction channels in EgtB. We show that EgtB contains a conserved tyrosine residue that reacts via proton-coupled electron transfer with the iron(III)-superoxo species and creates an iron(III)-hydroperoxo intermediate, thereby preventing the possible thiolate dioxygenation side reaction. The nucleophilic C-S bond-formation step happens subsequently concomitant to relay of the proton of the iron(II)-hydroperoxo back to Tyr377. This is the rate-determining step in the reaction cycle and is followed by hydrogen-atom transfer from the CE1-H group of trimethyl histidine substrate to iron(II)-superoxo. In the final step, a quick and almost barrierless sulfoxidation leads to the sulfoxide product complexes. The work highlights a unique machinery and active-site setup of the enzyme that drives the sulfoxide synthase reaction.