The critical role of the ferryl intermediate in catalyzing the oxygen chemistry of monooxygenases, oxidases, or peroxidases has been known for decades. In contrast, its involvement in heme-based dioxygenases, such as human indoleamine 2,3-dioxygenase (hIDO), was not recognized until recently. In this study, H(2)O(2) was used as a surrogate to generate the ferryl intermediate of hIDO. Spectroscopic data demonstrate that the ferryl species is capable of oxidizing azinobis(3-ethylbenzothiazoline-6-sulfonic acid) but not L-Trp. Kinetic studies reveal that the conversion of the ferric enzyme to the ferryl intermediate facilitates the L-Trp binding rate by >400-fold; conversely, L-Trp binding to the enzyme retards the peroxide reaction rate by ∼9-fold, because of the significant elevation of the entropic barrier. The unfavorable entropic factor for the peroxide reaction highlights the scenario that the structure of hIDO is not optimized for utilizing H(2)O(2) as a co-substrate for oxidizing L-Trp. Titration studies show that the ferryl intermediate possesses two substrate-binding sites with a K(d) of 0.3 and 440 μM and that the electronic properties of the ferryl moiety are sensitive to the occupancy of the two substrate-binding sites. The implications of the data are discussed in the context of the structural and functional relationships of the enzyme.