LmbB2 is a peroxygenase-like enzyme that hydroxylates L-tyrosine to L-3,4-dihydroxyphenylalanine (DOPA) in the presence of hydrogen peroxide. However, its heme cofactor is ligated by a proximal histidine, not cysteine. We show that LmbB2 can oxidize L-tyrosine analogs with ring-deactivated substituents such as 3-nitro-, fluoro-, chloro-, iodo-L-tyrosine. We also found that the 4-hydroxyl group of the substrate is essential for reacting with the heme-based oxidant and activating the aromatic C-H bond. The most interesting observation of this study was obtained with 3-fluoro-L-tyrosine as a substrate and mechanistic probe. The LmbB2-mediated catalytic reaction yielded two hydroxylated products with comparable populations, i.e., oxidative C-H bond cleavage at C5 to generate 3-fluoro-5-hydroxyl-L-tyrosine and oxygenation at C3 concomitant with a carbon-fluorine bond cleavage to yield DOPA and fluoride. An iron protein-mediated hydroxylation on both C-H and C-F bonds with multiple turnovers is unprecedented. Thus, this finding reveals a significant potential of biocatalysis in C-H/C-X bond (X = halogen) cleavage. Further 18O-labeling results suggest that the source of oxygen for hydroxylation is a peroxide, and that a commonly expected oxidation by a high-valent iron intermediate followed by hydrolysis is not supported for the C-F bond cleavage. Instead, the C-F bond cleavage is proposed to be initiated by a nucleophilic aromatic substitution mediated by the iron-hydroperoxo species. Based on the experimental results, two mechanisms are proposed to explain how LmbB2 hydroxylates the substrate and cleaves C-H/C-F bond. This study broadens the understanding of heme enzyme catalysis and sheds light on enzymatic applications in medicinal and environmental fields.