The reaction of tryptamine with indolyl-3-alkane alpha-hydroxylase is shown to remove stereospecifically the pro-S hydrogen at C-2 of the side chain and to give hydroxytryptamine of "R" configuration. The reaction therefore proceeds stereospecifically with net inversion of configuration at C-2 of the tryptamine side chain. In the reaction of L-tryptophan methyl ester, the enzyme also catalyzes stereospecific removal of the pro-S hydrogen at C-3, but the product 3-hydroxytryptophan methyl ester is racemic at C-3. The unreacted tryptophan methyl ester is shown to incorporate solvent hydrogen into the pro-S position at C-3 in an at least partially stereospecific manner, suggesting that the reaction of L-tryptophan methyl ester is reversible. The hydrogens at C-1 of the tryptamine side chain and the alpha-hydrogen of L-tryptophan methyl ester are shown to be retained in the reactions. The results support the notion that the enzyme catalyzes stereospecific 1,4-dehydrogenation of 3-substituted indoles to the coresponding alkylidene indolenines as the primary reaction, followed by stereospecific or nonstereospecific hydration of these intermediates as a secondary process. Substrate specificity studies with a number of tryptophan analogs are in excellent agreement with such a mechanism.