The applications of biocatalysts in chemical industries are characterized by activity, selectivity, and stability. One key strategy to achieve high biocatalytic activity is the identification of novel enzymes with kinetics optimized for organic synthesis by Nature. The isolation of novel cytochrome P450 monooxygenase genes from Acidovorax sp. CHX100 and their functional expression in recombinant Pseudomonas taiwanensis VLB120 enabled efficient oxidation of cyclohexane to cyclohexanol. Although initial resting cell activities of 20Ug(CDW)(-1) were achieved, the rapid decrease in catalytic activity due to the toxicity of cyclohexane prevented synthetic applications. Cyclohexane toxicity was reduced and cellular activities stabilized over the reaction time by delivering the toxic substrate through the vapor phase and by balancing the aqueous phase mass transfer with the cellular conversion rate. The potential of this novel CYP enzyme was exploited by transferring the shake flask reaction to an aqueous-air segmented flow biofilm membrane reactor for maximizing productivity. Cyclohexane was continuously delivered via the silicone membrane. This ensured lower reactant toxicity and continuous product formation at an average volumetric productivity of 0.4gL(tube)(-1)h(-1) for several days. This highlights the potential of combining a powerful catalyst with a beneficial reactor design to overcome critical issues of cyclohexane oxidation to cyclohexanol. It opens new opportunities for biocatalytic transformations of compounds which are toxic, volatile, and have low solubility in water. Biotechnol. Bioeng. 2016;113: 52-61. (c) 2015 Wiley Periodicals, Inc.