The annotation of the genome sequence of Streptomyces coelicolor A3(2) revealed a cytochrome P450 (CYP) resembling various sterol 14alpha-demethylases (CYP51). The putative CYP open reading frame (SC7E4.20) was cloned with a tetrahistidine tag appended to the C-terminus and expressed in Escherichia coli. Protein purified to electrophoretic homogeneity was observed to bind the 14-methylated sterols lanosterol and 24-methylene-24,25-dihydrolanosterol (24-MDL). Reconstitution experiments with E. coli reductase partners confirmed activity in 14alpha-demethylation for 24-MDL, but not lanosterol. An S. coelicolor A3(2) mutant containing a transposon insertion in the CYP51 gene, which will abolish synthesis of the functional haemoprotein, was isolated as a viable strain, the first time a CYP51 has been identified as non-essential. The role of this CYP in bacteria is intriguing. No sterol product was detected in non-saponifiable cell extracts of the parent S. coelicolor A3(2) strain or of the mutant. S. coelicolor A3(2) CYP51 contains very few of the conserved CYP51 residues and, even though it can catalyse 14alpha-demethylation, it probably has another function in Streptomyces. We propose that it is a member of a new CYP51 subfamily.