The cDNA encoding cytochrome P-45017alpha from bovine adrenal cortex was expressed in Saccharomyces cerevisiae under the control of the galactose-inducible GAL10 promoter. Carbon monoxide difference spectra of the galactose-induced yeast cells showed expression of about 240 nmol of P-45017alpha per liter of the culture. Binding of progesterone to the cytochrome P-45017alpha was clearly detectable already with intact yeast cells as judged by the formation of type I substrate difference spectra. Yeast cells grown on minimal medium containing galactose actively converted progesterone to 17alpha-hydroxyprogesterone, this indicating the functional integrity of the heterologously expressed P-45017alpha and its efficient coupling with the constitutive NADPH-cytochrome P-450 reductase. More than 80% of the metabolite produced was secreted into the culture medium. Cultivation in a rich non-selective medium resulted in the formation of an additional product, which was identified by mass spectrometry as 17alpha-hydroxy-20-dihydroprogesterone. Kinetic analysis revealed that its production followed the cytochrome P-45017alpha-dependent hydroxylation reaction. The reduction of the 20-keto group of 17alpha-hydroxyprogesterone was also observed in the non-induced yeast culture, this suggesting the involvement of the constitutive enzyme. Among several substrates tested, progesterone was hydroxylated by the cytochrome P-45017alpha expressed with the highest activity. The activity towards other substrates decreased in the sequence: 11beta- > 11alpha- > 19-hydroxyprogesterone. In conclusion, the present results show that the host-vector system used is suitable for high-level functional expression of P-45017alpha and further application of enzymatic properties of this protein to perform specific steroid biotransformations.