The steroid superfamily includes a wide range of compounds that are essential for living organisms of the animal and plant kingdoms. Structural modifications of steroids highly affect their biological activity. In this review, we focus on hydroxylation of steroids by bacterial hydroxylases, which take part in steroid catabolic pathways and play an important role in steroid degradation. We compare three distinct classes of metalloenzymes responsible for aerobic or anaerobic hydroxylation of steroids, namely: cytochrome P450, Rieske-type monooxygenase 3-ketosteroid 9α-hydroxylase, and molybdenum-containing steroid C25 dehydrogenases. We analyze the available literature data on reactivity, regioselectivity, and potential application of these enzymes in organic synthesis of hydroxysteroids. Moreover, we describe mechanistic hypotheses proposed for all three classes of enzymes along with experimental and theoretical evidences, which have provided grounds for their formulation. In case of the 3-ketosteroid 9α-hydroxylase, such a mechanistic hypothesis is formulated for the first time in the literature based on studies conducted for other Rieske monooxygenases. Finally, we provide comparative analysis of similarities and differences in the reaction mechanisms utilized by bacterial steroid hydroxylases.