Sterol 14alpha-demethylase encoded by CYP51 is a mixed-function oxidase involved in sterol synthesis in eukaryotic organisms. Completion of the Mycobacterium tuberculosis genome project revealed that a protein having homology to mammalian 14alpha-demethylases might be present in this bacterium. Using genomic DNA from mycobacterial strain H(37)Rv, we have established unambiguously that the CYP51-like gene encodes a bacterial sterol 14alpha-demethylase. Expression of the M. tuberculosis CYP51 gene in Escherichia coli yields a P450, which, when purified to homogeneity, has the predicted molecular mass, ca. 50 kDa on SDS/PAGE, and binds both sterol substrates and azole inhibitors of P450 14alpha-demethylases. It catalyzes 14alpha-demethylation of lanosterol, 24, 25-dihydrolanosterol, and obtusifoliol to produce the 8,14-dienes stereoselectively as shown by GC/MS and (1)H NMR analysis. Both flavodoxin and ferredoxin redox systems are able to support this enzymatic activity. Structural requirements of a 14alpha-methyl group and Delta(8(9))-bond were established by comparing binding of pairs of sterol substrate that differed in a single molecular feature, e.g., cycloartenol paired with lanosterol. These substrate requirements are similar to those established for plant and animal P450 14alpha-demethylases. From the combination of results, the interrelationships of substrate functional groups within the active site show that oxidative portions of the sterol biosynthetic pathway are present in prokaryotes.