Hydroxytryptophan serves as a chemical precursor to a variety of bioactive specialized metabolites, including the human neurotransmitter serotonin and the hormone melatonin. Although the human and animal routes to hydroxytryptophan have been known for decades, how bacteria catalyze tryptophan indole hydroxylation remains a mystery. Here we report a class of tryptophan hydroxylases that are involved in various bacterial metabolic pathways. These enzymes utilize a histidine-ligated heme cofactor and molecular oxygen or hydrogen peroxide to catalyze regioselective hydroxylation on the tryptophan indole moiety, which is mechanistically distinct from their animal counterparts from the nonheme iron enzyme family. Through genome mining, we also identify members that can hydroxylate the tryptophan indole ring at alternative positions. Our results not only reveal a conserved way to synthesize hydroxytryptophans in bacteria but also provide a valuable enzyme toolbox for biocatalysis. As proof of concept, we assemble a highly efficient pathway for melatonin in a bacterial host.