We explored the molecular diversity and functional capabilities of cytochrome P450 monooxygenases (P450s) from the brown-rot basidiomycete Postia placenta. Using bioinformatic and experimental data, we found 250 genes of P450s in the whole genome, including 60 putative allelic variants. Phylogenetic analysis revealed the presence of 42 families, including 18 novel families. Comparative phylogenetic analysis of P450s from P. placenta and the white-rot basidiomycete Phanerochaete chrysosporium suggested that vigorous gene duplication and molecular evolution occurred after speciation of basidiomycetes. Among the 250 gene models, 184 were isolated as full-length cDNA and transformed into Saccharomyces cerevisiae to construct a functional library in which recombinant P450s were co-expressed with yeast NADPH-P450 oxidoreductase. Using this library, the catalytic potentials of P450s against a wide variety of compounds were investigated. A functionomic survey allowed the discovery of novel catalytic properties of P. placenta P450s. The phylogenetic diversity of the CYP53 family in P. placenta was clear, and CYP53D2 is capable of converting stilbene derivatives. This is the first report of this peculiar function of the CYP53 family. Our increased understanding of the molecular and functional diversity of P450s in this fungus will facilitate comprehension of metabolic diversity in basidiomycetes and has future biotechnology applications.