Oat is known to synthesize several epoxy fatty acids in seeds using peroxygenase (PXG), a type of hydroperoxide-dependent epoxygenase. This thesis aims to molecularly clone and functionally characterize the PXG genes from oat developing seeds. The research started with identifying additional PXG genes from oat expressed sequence tag (EST) databases using a previously identified oat peroxygenase AsPXG1 as a query sequence. This resulted in the identification of six homologous contig sequences from the EST data bases. Of them, two contigs with high sequence similarity and alignment with plant PXG/caleosin proteins were selected for cloning and functional analysis. Rapid amplification of cDNA ends (RACE) and reverse transcriptase-polymerase chain reaction (RT-PCR) were used to retrieve the full length cDNAs of the contigs, which resulted in identification of three putative PXG genes, AsPXG2, AsPXG3 and AsPXG4. Open reading frame (ORF) of AsPXG2 is 702 bp long encoding a polypeptide of 233 amino acids, while ORFs of both AsPXG3 and AsPXG4 are 627 bp in length coding for 208 amino acids. All these putative peroxygenases comprise a single transmembrane domain, presumably for lipid droplet anchoring, conserved hisditine residues for heme-binding and a conserved EF-hand motif for calcium-binding. To functionally characterize the three genes, their ORFs were individually expressed in Escherichia coli/Pichia pastoris. The enzymatic assays showed that all transformants produced 9,10-epoxystearic acid methyl ester in the presence of oleic acid methyl ester and cumene hydroperoxide, indicating all three genes encode functional peroxygenase. AsPXG3 has the highest specific activity at 42 mol/mg/min with about 25% substrate conversion efficiency. Substrate specificity assays on free fatty acids showed that AsPXG3 could epoxidize all mono- and poly-unsaturated fatty acids tested, with linolenic acid (C18:3-9c,12c,15c) being the most preferred substrate. Site-directed mutagenesis of three conserved histidines and nine conserved residues surrounding the histidines in AsPXG3 showed that substitution of the first conserved histidine at position 32 (H1) and the third conserved histidine at position 102 (H3) with alanine respectively resulted in complete loss of the enzymatic activity, while substitution of the second conserved histidine at position 98 (H2) resulted in only slight reduction of the activity, indicating that only H1 and H3 are absolutely essential and probably involved in heme-binding for the peroxygenase. Substitution of leucine at position 29 (M1), isoleucine at position 97 (M5), and lysine at position 101 (M8) with alanine reduced the enzymatic activity on oleic acid methyl ester by more than 80% relative to the wild type enzyme, indicating these three residues are also very important for catalytic activity. The activity of M1, M5 and M8 mutants was also drastically reduced on all other free mono-unsaturated fatty acids tested (>60%). However, to linolenic acid, M5 showed only slight reduction of the activity (~15%) and M8 even increased the activity by 12% relative to the wild type enzyme. These results suggest that these conserved residues might play roles in defining the shape and size of the catalytic site for interaction of the heme with fatty acid substrates.