This dissertation describes efforts to improve the oxidative capacity of n-alkane- induced Beauveria bassiana; a fungus and a versatile whole cell biocatalyst used in the biotransformation of steroids. n-Hexadecane was used as the carbon source during the growth of B. bassiana, presumably to induce the expression of oxidative enzymes, thus enhancing the oxidation of unactivated carbons. Dehydroepiandrosterone (DHEA) is an essential endogenous male-hormone and serves as a metabolic intermediate in the production of more potent androgens. Using DHEA as a substrate also provides the opportunity to study the hydroxylation of an unfunctionalized carbon, an attractive reaction that produces valuable intermediates for chemical synthesis. Results showed that exposing and inducing cells in n-hexadecane improves the synthesis of 11α-hydroxy derivatives. Reactions were carried out with cells grown on n-hexadecane, resulting in 65 ± 6.3 % conversion of DHEA to androstenediol (40.3% mM) and 3β,11∝,17β- trihydroxyandrost-5-ene (22.8% mM), as determined by HPLC, NMR and LCMS analyses. However, experiments with non-induced cells resulted in a poor substrate conversion (17%). To extend use of B. bassiana to pharmaceutical applications, it was necessary to optimize reaction conditions such as biocatalyst preparation, substrate concentration, agitation reaction temperature and pH. Higher substrate conversion, selectivity and yield of desired product were achieved with the reactor arrangement of “Resting Cells”. The apparent rate of reaction fits a Michaelis-Menten kinetic model with a maximum reaction rate of 4.45 mM/day, revealing that the transformation of intermediate androstenediol to desired 3β,11∝,17β-trihydroxyandrost-5-ene is the limiting step in the reaction. Interestingly, when a diluted amount of substrate was used, a higher yield of 11∞-hydroxy steroid was achieved. Also, reactions at 26°C with pH ranges between 6.0 and 7.0, resulted in the highest conversion (70%) and the higher product yield (45.8%). The maximum conversion of DHEA (71%) was achieved in experiments with high biomass loading, and the increment of desired product yield (11∝-hydroxy) was directly proportional to the amount of biomass used. Moreover, a high VMax/KM value was achieved with high biomass yields. Interestingly, the changes in biomass yield did not have a considerable effect on reaction selectivity. The main drawbacks of biocatalysis for production of steroids were addressed and approaches to minimize the drawbacks have been presented. The production of desired product (11∝-DHEA) was significantly improved using cells previously adapted to n-hexadecane.