Activating industrially important aromatic hydrocarbons by installing halogen atoms is extremely important in organic synthesis and often improves the pharmacological properties of drug molecules. To this end, tryptophan halogenase enzymes are potentially valuable tools for regioselective halogenation of arenes, including various industrially important indole derivatives and similar scaffolds. Although endogenous enzymes show reasonable substrate scope towards indole compounds, their efficacy can often be improved by engineering. Using a structure‐guided semi‐rational mutagenesis approach, we have developed two RebH variants with expanded biocatalytic repertoires that can efficiently halogenate several novel indole substrates and produce important pharmaceutical intermediates. Interestingly, the engineered enzymes are completely inactive towards their natural substrate tryptophan in spite of their high tolerance to various functional groups in the indole ring. Computational modelling and molecular dynamics simulations provide mechanistic insights into the role of gatekeeper residues in the substrate binding site and the dramatic switch in substrate specificity when these are mutated.