Functionalized indoles are recurrent motifs in bioactive natural products and pharmaceuticals. While transition metal-catalyzed carbene transfer has provided an attractive route to afford C3-functionalized indoles, these protocols are viable only in the presence of N-protected indoles, owing to competition from the more facile N-H insertion reaction. Herein, a biocatalytic strategy for enabling the direct C-H functionalization of unprotected indoles is reported. Engineered variants of myoglobin provide efficient biocatalysts for this reaction, which has no precedents in the biological world, enabling the transformation of a broad range of indoles in the presence of ethyl α-diazoacetate to give the corresponding C3-functionalized derivatives in high conversion yields and excellent chemoselectivity. This strategy could be exploited to develop a concise chemoenzymatic route to afford the nonsteroidal anti-inflammatory drug indomethacin.