Claviceps purpurea bifunctional Δ12‐hydroxylase/desaturase, CpFAH12, and monofunctional desaturase CpFAD2, share 86% of sequence identity. To identify the underlying determinants of the hydroxylation/desaturation specificity, chimeras of these two enzymes were tested for their fatty acid production in an engineered Yarrowia lipolytica strain. It reveals that transmembrane helices are not involved in the hydroxylation/desaturation specificity whereas all cytosolic domains have an impact on it. Especially, replacing the CpFAH12 cytosolic part near the second histidine‐box by the corresponding CpFAD2 part annihilates all hydroxylation activity. Further mutagenesis experiments within this domain identified isoleucine 198 as the crucial element for the hydroxylation activity of CpFAH12. Monofunctional variants performing the only desaturation were obtained when this position was exchanged by the threonine of CpFAD2. Saturation mutagenesis at this position showed modulation in the hydroxylation/desaturation specificity in the different variants. The WT enzyme was demonstrated as the most efficient for ricinoleic acid production and some variants showed a better desaturation activity. A model based on the recently discovered membrane desaturase structures indicate that these changes in specificity are more likely due to modifications in the di‐iron center geometry rather than changes in the substrate binding mode.