Oxygenase‐containing cyanobacteria constitute promising whole‐cell biocatalysts for oxyfunctionalization reactions. Photosynthetic water oxidation thereby delivers the required cosubstrates, that is activated reduction equivalents and O2, sustainably. A recombinant Synechocystis sp. PCC 6803 strain showing unprecedentedly high photosynthesis‐driven oxyfunctionalization activities is developed, and its technical applicability is evaluated. The cells functionally synthesize a heterologous cytochrome P450 monooxygenase enabling cyclohexane hydroxylation. The biocatalyst‐specific reaction rate is found to be light‐dependent, reaching 26.3 ± 0.6 U gCDW−1 (U = μmol min−1 and cell dry weight [CDW]) at a light intensity of 150 µmolphotons m−2 s−1. In situ substrate supply via a two‐liquid phase system increases the initial specific activity to 39.2 ± 0.7 U gCDW−1 and stabilizes the biotransformation by preventing cell toxification. This results in a tenfold increased specific product yield of 4.5 gcyclohexanol gCDW−1 as compared to the single aqueous phase system. Subsequently, the biotransformation is scaled from a shake flask to a 3 L stirred‐tank photobioreactor setup. In situ O2 generation via photosynthetic water oxidation allows a nonaerated process operation, thus circumventing substrate evaporation as the most critical factor limiting the process performance and stability. This study for the first time exemplifies the technical applicability of cyanobacteria for aeration‐independent light‐driven oxyfunctionalization reactions involving highly toxic and volatile substrates.