The Pseudomonas oleovorans alkane hydroxylase and xylene oxygenase from Pseudomonas putida are versatile mono‐oxygenases for stereo‐ and regioselective oxidation of aliphatic and aromatic hydrocarbons. Pseudomonas oleovorans and alkanol dehydrogenase deficient mutants of Pseudomonas have previously been used to produce alkanols from various alkanes and optically active epoxides from alkenes. Similarly, P. putida strains have been used to produce aromatic alcohols, aromatic acids, and optically active styrene oxides. A limitation in the use of Pseudomonas strains for bioconversions is that these strains can degrade some of the products formed. To counter this problem, we have constructed Escherichia coli recombinants, which contain the alk genes from the OCT plasmid of P. oleovorans [E. coli HB101 (pGEc47)] and the xylMA genes from the TOL plasmid of P. putida mt‐2 [E. coli HB101 (pGB63)], encoding alkane hydroxylase and xylene oxygenase, respectively. Escherichia coli HB101 (pGEc47) was used to produce octanoic acid from n‐octane and E. coli HB101 (pBG63) was put to use for the oxidation of styrene to styrene oxide in two‐liquid phase biocatalysis at high cell densities. The alk+ recombinant strain E. coli HB101 (pGEc47) was grown to 40 g/L cell dry mass in the presence of n‐octane, which was converted to octanoic acid by the alkane oxidation system, the product accumulating in the aqueous phase. The xyl+ recombinant E. coli HB101 (pBG63) was grown to a cell density of 26 g/L cell dry mass in the presence of around 7% (v/v) n‐dodecane, which contained 2% (v/v) styrene. The recombinant E. coli (xyl+) converted styrene to (S)‐(+)‐styrene oxide at high enantiomeric excess (94% ee) and this compound partitioned almost exclusively into the organic phase. Using these high‐cell‐density two‐liquid‐phase cultures, the products accumulated rapidly, yielding high concentrations of products (50 mM octanoic acid and 90 mM styrene oxide) in the respective phases. © 1996 John Wiley & Sons, Inc.