In this study, two phenol-degrading bacterial strains, designated as PI1 and PI2, were isolated from activated sludge for the production of indigoids from indole. According to the 16S ribosomal RNA (rRNA) gene sequence analysis, strains PI1 and PI2 were identified as Pseudomonas sp. and Acinetobacter sp., respectively. Liquid chromatography/time-of-flight/mass spectrometry (LC/TOF/MS) was applied to analyze the metabolites during the biotransformation of indole by the phenol-degrading strains. The results indicated that both strains could catalyze the formation of four indigoids with the same prominent molecular ion (M-H)(-) peak at m/z 261.067 and molecular formula of C16H10N2O2, including indigo and a purple product, 2-(7-oxo-1H-indol-6(7H)-ylidene) indolin-3-one. Isatin and 7-hydroxyindole were detected as the intermediates. Thus, the possible pathways for the production of indigoids from indole were proposed. Subsequently, the optimal conditions for the production of indigo from indole were determined using response surface methodology, and 11.82 ± 0.30 and 17.19 ± 0.49 mg/L indigo were produced by strains PI1 and PI2, respectively. The present study should provide potential candidates for microbial production of indigoids.