Matrix metalloproteinases (MMPs) function in homeostatic and repair processes, but unregulated catalysis by these extracellular proteinases leads to the pathological destruction of tissue proteins. An important mechanism for controlling enzyme activity might involve hypochlorous acid (HOCl), a potent oxidant produced by the myeloperoxidase system of phagocytes. We have shown that inactivation of MMP-7 (matrilysin) by HOCl coincides with the formation of a novel oxidation product, WG-4, through modification of adjacent tryptophan and glycine residues and loss of 4 atomic mass units. Here, we use mass spectrometry, UV/visible spectroscopy, hydrogen-deuterium exchange, and NMR spectroscopy to investigate the formation and structure of WG-4. For the initial step, HOCl chlorinates the indole ring of tryptophan. The resulting 3-chloroindolenine generates a previously unknown cyclic indole-amide species, in which tryptophan cross-links to the main chain nitrogen of the adjacent glycine residue to form an aromatic six-membered ring. WG-4 kinks and stiffens the peptide backbone, which may hinder the interaction of substrate with the catalytic pocket of MMP-7. Our observations indicate that specific structural motifs are important for controlling protein modification by oxidants and suggest that pericellular oxidant production by phagocytes might limit MMP activity during inflammation.