Steroid monooxygenase of Rhodococcus rhodochrous is a Baeyer-Villigerase catalyzing the insertion of an oxygen atom between the C(17)- and C(20)-carbons of progesterone to produce testosterone acetate. The 5.1-kbp-long BamHI DNA fragment containing the steroid monooxygenase gene, smo, was cloned from the chromosomal DNA and sequenced. The smo gene is 1,650 nucleotides long, starts with a TTG codon, and ends with a TGA codon. The deduced amino acid sequence indicates that the enzyme protein consist of 549 amino acid residues with a molecular mass of 60,133. Thus, the molecular mass of the holoenzyme is 60,919. The amino acid sequence is highly homologous (41.2% identity) to that of cyclohexanone monooxygenase of Acinetobacter sp. In the upstream of the smo gene, the genes of heat shock proteins, dnaK, grpE, and dnaJ, located on the complementary strand, and the DNA-inserts of pSMO and pD1, which contains the ksdD gene, were joined at the BamHI site of the dnaJ gene. The smo gene was modified at the initiation codon to ATG and ligated with an expression vector to construct a plasmid, pSMO-EX, and introduced into Escherichia coli cells. The transformed cells hyperexpressed the steroid monooxygenase as an active and soluble protein at more than 40 times the level in R. rhodochrous cells. Purification of the recombinant monooxygenase from the E. coli cells by simplified procedures yielded about 2.3 mg of enzyme protein/g wet cells. The purified recombinant steroid monooxygenase exhibited indistinguishable molecular and catalytic properties from those of the R. rhodochrous enzyme.