Product selectivity of ammonia oxidation by ammonia-oxidizing bacteria (AOB) is tightly controlled by metalloenzymes. Hydroxylamine oxidoreductase (HAO) is responsible for the oxidation of hydroxylamine (NH2OH) to nitric oxide (NO). The non-metabolic enzyme cytochrome (cyt) P460 also oxidizes NH2OH, but instead produces nitrous oxide (N2O). While both enzymes use a heme P460 cofactor, they selectively oxidize NH2OH to different products. Previously reported structures of Nitrosomonas sp. AL212 cyt P460 show that a capping phenylalanine residue rotates upon ligand binding, suggesting that this Phe may influence substrate and/or product binding. Here, we show via substitutions of the capping Phe in Nitrosomonas europaea cyt P460 that the bulky phenyl side-chain promotes the heme-lysine cross-link forming reaction operative in maturing the cofactor. Additionally, the Phe side-chain plays an important role in modulating product selectivity between N2O and NO during NH2OH oxidation under aerobic conditions. A picture emerges where the sterics and electrostatics of the side-chain in this capping position control the kinetics of N2O formation and NO binding affinity. This demonstrates how the outer coordination sphere of cyt P460 is tuned not only for selective NH2OH oxidation, but also for the autocatalytic cross-link forming reaction that imbues activity to an otherwise inactive protein.