Methane is an ideal alternative to petroleum refining as a chemical feedstock source since it is highly abundant an inexpensive. However, the lack of selective methane oxidation catalysts has limited such utilization. Starting from cytochrome P450 CYP102A1 (BM3) from Bacillus megaterium, which prefers C12-C20 fatty acids as its substrates, I investigated several protein engineering approaches to shift the enzyme’s substrate specificity toward small gaseous alkanes, with the ultimate goal of methane. By continuing previous directed evolution efforts in our group, a variant with wild-type-like affinity and catalytic efficiency for propane, P450PMO, was isolated. To alleviate the loss of protein thermostability (~ 10 oC) as a result of this approach, mutations were targeted to the BM3 active site with site saturation mutagenesis, targeted mutagenesis with a reduced set of amino acids, and computationally guided library designs. From these enzyme libraries, variants were identified that replicated much of the P450PMO activities with a minimal number of mutations while maintaining wild-type thermostability. Continuing the protein engineering with a high throughput ethane hydroxylation screen, variants with improved in vitro ethane hydroxylation activity were obtained. However, in whole-cell ethane bioconversions, BM3-derived variants could not match the activity of a natural P450 alkane hydroxylase, CYP153A6. To investigate the oxidation capability of the P450 oxo-ferryl porphyrin radical intermediate directly, I employed a variety of terminal oxidants to support P450 alkane hydroxylation reactions abridging the P450 catalytic cycle. In this study, the CYP153A6 oxo-ferryl intermediate was able to oxidize methane in reactions using iodosylbenzene, which demonstrated that direct methane-to-methanol conversion by a P450 heme porphyrin catalyst at ambient conditions is possible and does not necessarily require the use of additional effectors to alter the active site geometry.