The amino acid tryptophan is found in nearly all proteins.
Positive Indole: Bacteria that contain tryptophanase can hydrolyse tryptophan to its metabolic products(indole, pyruvic acid, ammonia)
Tryptophan ----Tryptophanase-----> Indole + Pyruvic Acid + Ammonia
The bacteria use the pyruvic acid and ammonia to satisfy nutritional needs; indole is not used and accumulates in the medium.
This will form a layer of red color on the surface of the medium when added with Kovac’s reagent due to the combination of aldehyde in the Kovac’s reagent and indole.
Indole + added Kovac’s reagent = Red color
Negative Indole: There would be no red color formation on the agar surface when added with Kovac’s solution.
Tryptophan ----No Tryptophanase-----> Tryptophan
Tryptophan + added Kovac’s reagent = no red color
http://www.microbelibrary.org/microbelibrary/files/ccImages/Articleimages/Johnson/images/INDOLE%20Enterobacter%20Escherichia%20coli%20fig1.jpg