Cytochrome P450 BM-3 from Bacillus megaterium was engineered using a combination of directed evolution and site-directed mutagenesis to hydroxylate linear alkanes regio- and enantioselectively using atmospheric dioxygen as an oxidant. BM-3 variant 9-10A-A328V hydroxylates octane at the 2-position to form S-2-octanol (40% ee). Another variant, 1-12G, also hydroxylates alkanes larger than hexane primarily at the 2-position but forms R-2-alcohols (40-55% ee). These biocatalysts are highly active (rates up to 400 min(-1)) and support thousands of product turnovers. The regio- and enantioselectivities are retained in whole-cell biotransformations with Escherichia coli, where the engineered P450s can be expressed at high levels and the cofactor is supplied endogenously.