A steroid 15β-hydroxylating whole-cell solvent tolerant biocatalyst was constructed by expressing the Bacillus megaterium steroid hydroxylase CYP106A2 in the solvent tolerant Pseudomonas putida S12. Testosterone hydroxylation was improved by a factor 16 by co-expressing Fer, a putative Fe-S protein from Bacillus subtilis. In addition, the specificity for 15β-hydroxylation was improved by mutating threonine residue 248 of CYP106A2 into valine. These new insights provide the basis for an optimized whole-cell steroid-hydroxylating biocatalyst that can be applied with an organic solvent phase. © 2007 Elsevier B.V. All rights reserved.