C–S bond formation reactions are widely distributed in the biosynthesis of biologically active molecules, and thus have received much attention over the past decades. Herein, we report intramolecular C–S bond formation by a P450 monooxygenase, TleB, which normally catalyzes a C−N bond formation in teleocidin biosynthesis. Based on the proposed reaction mechanism of TleB, a thiol‐substituted substrate analogue was synthesized and tested in the enzyme reaction, which afforded the unprecedented sulfur‐containing thio‐indolactam V, in addition to an unusual indole‐fused 6/5/8‐tricyclic product whose structure was determined by the crystalline sponge method. Interestingly, conformational analysis revealed that the SOFA conformation is stable in thio‐indolactam V, in sharp contrast to the major TWIST form in indolactam V, resulting in differences in their biological activities.