Nitration reactions are crucial for many industrial syntheses; however, current protocols lack site-specificity and employ hazardous chemicals. The non-canonical cytochrome P450 enzymes RufO and TxtE catalyze the only known direct aromatic nitration reactions in nature, making them attractive model systems for the development of analogous biocatalytic and/or biomimetic reactions that proceed under mild conditions. While the associated mechanism has been well characterized in TxtE, much less is known about RufO. Herein, we present the first structure of RufO alongside a series of computational and biochemical studies investigating its unusual reactivity. We demonstrate that free L-tyrosine is not readily accepted as a substrate, despite previous reports to the contrary. Instead, we propose that RufO natively modifies L-tyrosine tethered to the peptidyl carrier protein of a non-ribosomal peptide synthetase encoded by the same biosynthetic gene cluster and present both docking and molecular dynamics simulations consistent with this hypothesis. Our results expand the scope of direct enzymatic nitration reactions and provide the first evidence for such a modification of a peptide synthetase-bound substrate that may aid in the downstream development of biocatalytic approaches to synthesize rufomycin analogs and related drug candidates.