Ergot alkaloids (EAs) are among the most important bioactive natural products. Fe-II/alpha-ketoglutarate-dependent dioxygenase Aj_EasH from Aspergillus japonicus is responsible for the formation of the cyclopropyl ring of the ergot alkaloid (EA) cycloclavine (4). Herein we reconstituted the biosynthesis of 4 in vitro from prechanoclavine (1) for the first time. Additionally, an unexpected activity of asymmetric hydroxylation at the C-4 position of EA compound festuclavine (5) for Aj_EasH was revealed. Furthermore, Aj_EasH also catalyzes the hydroxylation of two more EAs 9,10-dihydrolysergol (6) and elymoclavine (7). Thus, our results proved that Aj_EasH is a promiscuous and bimodal dioxygenase that catalyzes both the formation of cyclopropyl ring in 4 and the asymmetric hydroxylation of EAs. Molecular docking (MD) revealed the substrate-binding mode as well as the catalytic mechanism of asymmetric hydroxylation, suggesting more EAs could potentially be recognized and hydroxylated by Aj_EasH. Overall, the newly discovered activity empowered Aj_EasH with great potential for producing more diverse and bioactive EA derivatives.