Thiotemplated pyrrole is a prevailing intermediate in the synthesis of numerous natural products in which the pyrrole is tethered to a carrier protein (CP). Biosynthesis of the pyrrole requires oxidation of an l-proline side chain. Herein, we investigate the biocatalytic mechanism of proline-to-pyrrole synthesis by molecular dynamics simulations, quantum mechanics/molecular mechanics simulations, and electronic structure calculations using the recently reported (Thapa, H. R., et al. Biochemistry 2019, 58, 918) structure of a type II nonribosomal protein synthetase (NRPS) Bmp3-Bmp1 (Oxidase-CP) complex. The substrate (l-proline) is attached to the Bmp1(CP), and the catalytic site is located inside the flavin-dependent oxidase (Bmp3). We show that the FAD isoalloxazine ring is stabilized in the catalytic site of Bmp3 by strong hydrogen bonding with Asn123, Ile125, Ser126, and Thr158. After the initial deprotonation followed by an enamine-imine tautomerization, oxidation of the C2-C3 or C2-N1 bond, through a hydride transfer (from either C3 or N1), is required for the pyrrole synthesis. Computational results indicate that the hydride transfer is more likely to occur from C3 than N1. Additionally, we demonstrate the elasticity in the oxidase active site through enzymatic synthesis of proline derivatives.