We engineered the cytochrome P450 monooxygenase CYP107D1 (OleP) from Streptomyces antibioticus for the stereo-and regioselective 7b-hydroxylation of lithocholic acid (LCA) to yield ursodeoxycholic acid (UDCA). OleP was previously shown to hydroxylate testosterone at the 7b-position but LCA is exclusively hydroxylated at the 6b-position, forming murideoxycholic acid (MDCA). Structural and 3DM analysis, and molecular docking were used to identify amino acid residues F84, S240, and V291 as specificitydetermining residues. Alanine scanning identified S240A as a UDCA-producing variant. A synthetic "small but smart" library based on these positions was screened using a colorimetric assay for UDCA. We identified a nearly perfectly regioand stereoselective triple mutant (F84Q/S240A/V291G) that produces 10-fold higher levels of UDCA than the S240A variant. This biocatalyst opens up new possibilities for the environmentally friendly synthesis of UDCA from the biological waste product LCA. Ursodeoxycholic acid (UDCA) is a valuable bile acid frequently prescribed for the treatment of cholecystitis as it can solubilize cholesterol gallstones with fewer side effects than chenodeoxycholic acid (CDCA). [1] UDCA also has anti-inflammatory properties [2] and is applied in the therapy of cystic fibrosis [3] and liver diseases like primary biliary cholangitis. [4] The major natural source of UDCA is bear bile, [5] a popular traditional medicine obtained by biliary catheterization of farmed bears. Alternatively, semi-synthetic UDCA can be produced from cholic acid (CA) [6] or CDCA. [7, 8] The synthesis route starting from CA forms CDCA within 5 steps, including a Wolff-Kishner reduction, and an epimerization at C7 to produce UDCA (Scheme 1 a, Scheme S1). [9] The yields of this pathway do not exceed 30 %. To overcome these limitations, a shorter synthesis route based on the biocatalytic epimerization of CDCA to UDCA (Scheme 1 a) has been developed. [7, 10] LCA is an abundant and inexpensive waste product of meat production [11] as this bile acid is found in farmed animals like sheep, [12] cattle, [12] and pigs. [13] Currently, no biotechnological process [14] utilizing LCA originating from these sources is known, making it a desirable starting material for the synthesis of UDCA. A few microbial organisms have been reported to form UDCA from LCA. [15] For example, the fungus Fusarium equiseti converts LCA to a number of products, including UDCA at 35 % yield. [16] However, there is currently no enzyme known to selectively hydroxylate LCA at the 7b-position to form UDCA and its synthesis pathway in microbial organisms, starting from LCA, remains enigmatic. An enzyme for direct 7b-hydroxylation would be a valuable tool for direct conversion of LCA to UDCA without involving the complex metabolism of fungi that invariably [16] produce multiple undesired side products, [15] complicating downstream processing. A major challenge in the enzymatic conversion of LCA to UDCA is the hydrophobicity and thus, extremely low water solubility of LCA co...