The cytochrome P450 enzymes are major catalysts involved in the oxidations of xenobiotic chemicals in microorganisms as well as higher animals and plants. Because of their functional roles, they offer potential in biodegradation technology. A number of microbial P450s have already been characterized and offer advantages in terms of their high catalytic rates and facile expression in microorganisms. One approach to extending the catalytic selectivity to more compounds in the environment is rational design. In three cases, the three-dimensional structures of bacterial cytochrome P450 enzymes are available and can be further understood through studies with molecular dynamics. Many mammalian cytochrome P450 enzymes have been studied extensively and have potential for biodegradation because of their broad catalytic selectivities (e.g., P450 2E1). Several advances have been made in the heterologous expression of these proteins in microorganisms. Improvements under development include electron transfer from flavodoxin and the use of cytochrome P450:NADPH-cytochrome P450 reductase fusion proteins. Random mutagenesis offers the potential of improving the catalytic activities of some of these proteins. Future challenges include the use of cytochrome P450 expression vectors in microorganisms capable of thriving in the environment; recent success in expression of vectors in Salmonella genotoxicity tester strains may be encouraging in this regard.