Abstract21‐Hydroxy‐20‐methylpregn‐4‐en‐3‐one (4‐HBC, bisnoralcohol) is a crucial intermediate for the synthesis of steroidal drugs. Significant challenges including by‐products formation and poor substrate solubility were still confronted in its main synthetic route by microbial conversion from phytosterol. Construction of a direct bioconversion pathway to 4‐HBC and an efficient substrate emulsion system is therefore urgently required. In this study, three novel isoenzymes of 3‐ketosteroid‐Δ1‐dehydrogenase (KstD) and 3‐ketosteroid 9α‐hydroxylase (KsH) in Mycobacterium neoaurum were excavated and identified as KstD4, KstD5, and KsHA3. A strain capable of fully directing the synthesis of 4‐HBC was metabolically engineered via serial genetic deletion combined with enhanced expression of cholesterol oxidase (ChOx2) and enoyl‐CoA hydratase (EchA19). Moreover, a micro‐emulsion system combined with soybean oil and hydroxypropyl‐β‐cyclodextrin improved substrate solubility and bioavailability. In batch fermentation, molar yield of 96.7% with 39.5 g L−1 4‐HBC was obtained from 50 g L−1 phytosterol. Our findings demonstrate the potential for industrial‐scale biosynthesis of 4‐HBC.