Halogenases catalyze reactions that introduce halogen atoms into electron-rich organic molecules. Vanadium-dependent haloperoxidases are generally considered to be promiscuous halogenating enzymes that have thus far been derived exclusively from eukaryotes, where their cellular function is often disputed. We now report the first biochemical characterization of a bacterial vanadium-dependent chloroperoxidase, NapH1 from Streptomyces sp. CNQ-525, which catalyzes a highly stereoselective chlorination-cyclization reaction in napyradiomycin antibiotic biosynthesis. This finding biochemically links a vanadium chloroperoxidase to microbial natural product biosynthesis.