Regio- and stereoselective hydroxylation of non-activated carbon atom is a very important reaction, but it remains a significant challenge in classic chemistry. Biohydroxylation provides a useful alternative, and considerable progress has been made recently in the discovery of new catalysts and the improvement of catalysis by substrate engineering. High throughput screening of microorganisms with a miniaturized system enables the fast identification of several new bacterial catalysts. One of them, Sphingomonas sp. HXN-200, exhibiting a broad substrate range, high activity, and high regio- and stereoselectivity, has been successfully used for practical hydroxylation. Substrate engineering based on “docking / protecting” group concept increases the substrate acceptance and regio- and stereoselectivity of known enzymatic systems, significantly extending the scope of biohydroxylations in organic synthesis. Directed evolution and site-directed mutagenesis of P450 monooxygenases, such as P450BM-3 and P450cam, have created enzymes with new substrate specificity, high activity, high selectivity, or high stability.