Dye-decolorizing peroxidases (DyPs) represent a unique family of heme peroxidases that exhibit significant biotechnological promise. DyPs resemble classical peroxidases and operate through the peroxidative cycle, but they differ in structure and function and are ubiquitous in bacterial genomes, particularly in gut-associated species. Nonetheless, the metabolic capabilities and physiological roles of DyPs within the intestine remain unexplored. Here, we report the discovery of a Lactobacillus fermentum-derived DyP (LfDyP) with the unexpected property of directly converting indole-3-acetic acid (IAA) into indole-3-aldehyde (IAld) and indole-3-carbinol (I3C). To elucidate the underlying mechanism, protein crystallography, site-directed mutagenesis, electron paramagnetic resonance (EPR), and density functional theory (DFT) calculations were conducted. LfDyP was found to catalyze the one-electron oxidative decarboxylation of IAA to the skatole radical and its resonance via a long-range electron transfer (LRET) mechanism in the presence of O 2 . This catalysis initiates the IAA catabolic network, which is further formed through the formation of peroxyl radicals, dimerization, and tetraoxide decomposition. In summary, this study demonstrates the (bio)chemical basis for the catabolism of IAA by the intestinal microbiota into multiple indole-based signaling molecules.