By a targeted enzyme engineering approach, we were able to create an efficient NADPH oxidase from a monooxygenase. Intriguingly, replacement of only one specific single amino acid was sufficient for such a monooxygenase-to-oxidase switch-a complete transition in enzyme activity. Pre-steady-state kinetic analysis and elucidation of the crystal structure of the C65D PAMO mutant revealed that the mutation introduces small changes near the flavin cofactor, resulting in a rapid decay of the peroxyflavin intermediate. The engineered biocatalyst was shown to be a thermostable, solvent tolerant, and effective cofactor-regenerating biocatalyst. Therefore, it represents a valuable new biocatalytic tool.