Vanadium-dependent haloperoxidases (VHPOs) are biotechnologically valuable and operationally versatile biocatalysts. VHPOs share remarkable active-site structural similarities yet display variable reactivity and selectivity. The factors dictating substrate specificity and, thus, a general understanding of VHPO reaction control still need to be discovered. This work's strategic single-point mutation in the cyanobacterial bromoperoxidase AmVHPO facilitates a selectivity switch to allow aryl chlorination. This mutation induces loop formation that interacts with the neighboring protein monomer, creating a tunnel to the active sites. Structural analysis of the substrate-R425S-mutant complex reveals a substrate-binding site at the interface of two adjacent units. There, residues Glu139 and Phe401 interact with arenes, extending the substrate residence time close to the vanadate cofactor and stabilizing intermediates. Our findings validate the long-debated existence of direct substrate binding and provide a detailed VHPO mechanistic understanding. This work will pave the way for a broader application of VHPOs in diverse chemical processes.