c Aryl-alcohol oxidase (AAO) is an extracellular flavoprotein that supplies ligninolytic peroxidases with H 2 O 2 during natural wood decay. With a broad substrate specificity and highly stereoselective reaction mechanism, AAO is an attractive candidate for studies into organic synthesis and synthetic biology, and yet the lack of suitable heterologous expression systems has precluded its engineering by directed evolution. In this study, the native signal sequence of AAO from Pleurotus eryngii was replaced by those of the mating ␣-factor and the K 1 killer toxin, as well as different chimeras of both prepro-leaders in order to drive secretion in Saccharomyces cerevisiae. The secretion of these AAO constructs increased in the following order: prepro␣-AAO > pre␣proK-AAO > preKpro␣-AAO > preproK-AAO. The chimeric pre␣proK-AAO was subjected to focused-directed evolution with the aid of a dual screening assay based on the Fenton reaction. Random mutagenesis and DNA recombination was concentrated on two protein segments (Met[␣1]-Val109 and Phe392-Gln566), and an array of improved variants was identified, among which the FX7 mutant (harboring the H91N mutation) showed a dramatic 96-fold improvement in total activity with secretion levels of 2 mg/liter. Analysis of the N-terminal sequence of the FX7 variant confirmed the correct processing of the pre␣proK hybrid peptide by the KEX2 protease. FX7 showed higher stability in terms of pH and temperature, whereas the pH activity profiles and the kinetic parameters were maintained. The Asn91 lies in the flavin attachment loop motif, and it is a highly conserved residue in all members of the GMC superfamily, except for P. eryngii and P. pulmonarius AAO. The in vitro involution of the enzyme by restoring the consensus ancestor Asn91 promoted AAO expression and stability.A ryl-alcohol oxidase (AAO; EC 1.1.3.7) is a flavoenzyme of the GMC (glucose-methanol-choline) oxidoreductase superfamily, the members of which share a N-terminal FAD-binding domain containing the canonical ADP-binding motif. Secreted by several white-rot fungi, this monomeric flavoprotein plays an essential role in natural lignin degradation (1). Accordingly, AAO oxidizes lignin-derived compounds and aromatic fungal metabolites, releasing H 2 O 2 that is required by ligninolytic peroxidases to attack the plant cell wall (2). Moreover, the H 2 O 2 produced by AAO is an efficient vehicle to generate highly reactive hydroxyl radicals through the Fenton reaction (Fe 2ϩ ϩ H 2 O 2 ¡ OH˙ϩ OH Ϫ ϩ Fe 3ϩ ), such that OH˙can act as a diffusible electron carrier to depolymerize plant polymers. AAO oxidizes a variety of aromatic benzyl (and some aliphatic polyunsaturated) alcohols to the corresponding aldehydes. In addition, AAO participates in the oxidation of aromatic aldehydes to the corresponding acids and also has activity on furfural derivatives (3).The past few years have witnessed an intense effort to discern the basis and mechanism of action underlying AAO catalysis (3-10). The AAO catalytic cycle involves dehydroge...