Rufomycin is a circular heptapeptide with anti-mycobacterial activity and is produced by Streptomyces atratus ATCC 14046. Its structure contains three non-proteinogenic amino acids, N-dimethylallyltryptophan, trans-2-crotylglycine, and 3-nitrotyrosine (3NTyr). Although the rufomycin structure was already reported in the 1960s, its biosynthesis, including 3NTyr generation, remains unclear. To elucidate the rufomycin biosynthetic pathway, we assembled a draft genome sequence of S. atratus and identified the rufomycin biosynthetic gene cluster (ruf cluster), consisting of 20 ORFs (rufA–rufT). We found a putative heptamodular nonribosomal peptide synthetase encoded by rufT, a putative tryptophan N-dimethylallyltransferase encoded by rufP, and a putative trimodular type I polyketide synthase encoded by rufEF. Moreover, the ruf cluster contains an apparent operon harboring putative cytochrome P450 (rufO) and nitric oxide synthase (rufN) genes. A similar operon, txtDE, is responsible for the formation of 4-nitrotryptophan in thaxtomin biosynthesis; the cytochrome P450 TxtE catalyzes the 4-nitration of Trp. Therefore, we hypothesized that RufO should catalyze the Tyr 3-nitration. Disruption of rufO abolished rufomycin production by S. atratus, which was restored when 3NTyr was added to the culture medium of the disruptant. Recombinant RufO protein exhibited Tyr 3-nitration activity both in vitro and in vivo. Spectroscopic analysis further revealed that RufO recognizes Tyr as the substrate with a dissociation constant of ∼0.1 μm. These results indicate that RufO is an unprecedented cytochrome P450 that catalyzes Tyr nitration. Taken together with the results of an in silico analysis of the ruf cluster, we propose a rufomycin biosynthetic pathway in S. atratus.