Streptomyces roseochromogenes, NCIB 10984, hydroxylates exogenous progesterone to 16a hydroxyprogesterone and thereafter in a second phase bioconversion to 2ß, 16a-dihydroxyprogesterone. Characterisation of this reaction was carried out at the whole cell level. The cellular components responsible for this reaction were also purified to homogeneity. S. roseochromogenes contains a cytochrome P450 and two electron transfer proteins, roseoredoxin and roseoredoxin reductase. A reconstituted incubation containing these purified proteins and the natural electron donor, NADH. produced identical hydroxyprogesterone metabolites as intact cells. In sodium periodate (Na104) supported incubations, the initial rate of progesterone hydroxylation was marginally higher than in the natural reconstituted system but the product yield was significantly lower. The yield data showed that the reconstituted natural pathway, supported multiple rounds of hydroxylation in contrast to a likely single round by a minority of P450s in the periodate reaction. When S. roseochromogenes was incubated with exogenous progesterone for 25 h the major metabolite, 16a-hydroxyprogesterone was produced in 3.6 fold excess to the minor metabolite 2ß, 16a-dihydroxyprogesterone. In a reconstituted system containing highly purified progesterone 16a-hydroxylase cytochrome P450, roseoredoxin and roseoredoxin reductase, both metabolites were produced but in a 10: 1 ratio. When S. roseochromogenes was preincubated with progesterone and the purified components of the hydroxylase system assayed as before, the ratio of 16a-hydroxyprogesterone to 2ß, 16adihydroxyprogesterone produced, decreased to 2.8: 1, virtually identical to the ratio in whole cell biotransformations. Reconstitution assays containing all combinations of hydroxylase proteins purified from progesterone preincubated and control cells, identified roseoredoxin as solely responsible for the observed changes in in vitro metabolite ratios. The fact that the 2.8: 1 ratio was also obtained when S. roseochromogenes was exposed to cycloheximide prior to progesterone pre-incubation; pointed to post translation modification of roseoredoxin. Separation of two isoforms by 2-D isoelectric focusing supported this proposition. A partial 10 amino acid sequence was obtained for both the cytochrome P450 and roseoredoxin for the purpose of probe design for eventual cloning. An amino acid sequence search revealed this P450 to be unique and unlike any other known P450 sequence. These two proteins were also successfully crystallised by hanging drop vapour diffusion trials, giving isomorphous crystals. These crystals will be used for structure determinations pending further growth.