We have converted cytochrome P450 BM-3 from Bacillus megaterium (P450 BM-3), a medium-chain (C12-C18) fatty acid monooxygenase, into a highly efficient catalyst for the conversion of alkanes to alcohols. The evolved P450 BM-3 exhibits higher turnover rates than any reported biocatalyst for the selective oxidation of hydrocarbons of small to medium chain length (C3-C8). Unlike naturally occurring alkane hydroxylases, the best known of which are the large complexes of methane monooxygenase (MMO) and membrane-associated non-heme iron alkane monooxygenase (AlkB), the evolved enzyme is monomeric, soluble, and requires no additional proteins for catalysis. The evolved alkane hydroxylase was found to be even more active on fatty acids than wild-type BM-3, which was already one of the most efficient fatty acid monooxgenases known. A broad range of substrates including the gaseous alkane propane induces the low to high spin shift that activates the enzyme. This catalyst for alkane hydroxylation at room temperature opens new opportunities for clean, selective hydrocarbon activation for chemical synthesis and bioremediation.