Dehaloperoxidase (DHP A) from the annelid Amphitrite ornata is a catalytically active hemoglobin-peroxidase that possesses an internal binding site in the distal pocket and an external binding site near the heme edge. We have recently demonstrated that DHP A has a unique two-site competitive binding mechanism, in which the internal and external binding sites communicate through two conformations of the distal histidine (H55). The native substrate is 2,4,6-tribromophenol, but DHP A is capable of oxidizing any 2,4,6-trihalophenol to the corresponding dihaloquinone and other products. While DHP A is very effective at oxidizing 2,4,6-trichlorophenol, assays of DHP A on 2,4-dichlorophenol and 4-chlorophenol show little to no activity. Binding of 4-halophenols in the internal site prevents oxidation of trihalogenated phenols at the external site, i.e. they are inhibitors. X-ray crystallography shows that when para-halogenated phenols (4-iodo-, 4-bromo-, 4-chlorophenol) bind internally, the halogen is accommodated by a hydrophobic cavity that is analogous to the Xenon 4 binding site in Sperm whale myoglobin. Using resonance Raman spectroscopy, we demonstrate that the apparent dissociation constants of the para-halogenated phenols mimic the trend observed in the X-ray crystal structures. The results suggest that a few amino acids (L100, V59, F21, F24, and F35) surrounding the hydrophobic cavity regulate internal binding of the inhibitor. Using site-directed mutagenesis, we have changed several of these amino acids to prevent internal binding, and thus to increase DHP A activity towards mono- and dichlorinated phenols. Mutation to tryptophan (F21W and V59W) gives rise to new radical intermediates which complicates the interpretation in terms of inhibitor binding. Alternatively, aliphatic amino acids and phenylalanine provide steric effects that can alter the oxidation of rates of 4-chloro-, and 2,4-dichlorophenol.