Storm-driven runoff scours accumulated sediments within stormwater drainage systems, transporting multi-source pollutants (including pathogens) into surface water through stormwater overflows, thereby elevating contamination risks in the recipient. Chlorine-based disinfection of overflowed stormwater applied in related storage tanks mitigates these risks before release. This study reveals that chlorophenylacetonitriles (CPANs), which are formed during the disinfection process, exhibit toxicity levels higher than conventional trihalomethanes and haloacetonitriles. Laboratory analyses conducted in this work demonstrated that sewer sediments — not runoff or stormwater — are the dominant precursor source for CPAN formation during overflow disinfection. Source apportionment further identified a robust linear correlation (R² = 0.95) between sediment indole concentrations (0.093–0.91 μg/g) and CPAN formation, experimentally confirming for the first time that indole is a critical precursor. Laboratory experiments also uncovered the presence of monochloroindoles in indole chlorination, a novel class of aromatic nitrogenous disinfection byproducts (DBPs). In addition, density functional theory calculations demonstrated that monochloroindole formation has lower activation energy barriers compared to CPAN pathways, resulting in new molecular-level insights into their preferential transformation. Given that indole serves as a shared precursor for both highly toxic CPANs and even more ecotoxic monochloroindoles, this study emphasizes the urgent need for sewer sediment management to mitigate the ecological and human health risks associated with these highly toxic nitrogenous DBPs.