Sesquiterpenes are common constituents of essential oil in plants. Their oxygenated derivatives often possess desirable flavor, fragrance, and pharmaceutical properties. Recently, the CYP264B1-based recombinant Escherichia coli whole-cell system has been constructed for the oxidation of sesquiterpenes. However, limiting factors of this system related to the high volatility of substrates and the suitability of the P450 redox partner need to be addressed. In this work, the improvement of the system was implemented with (+)-α-longipinene as a model substrate. By using 2-hydroxypropyl-β-cyclodextrin and an alternative ferredoxin reductase, the conversion of (+)-α-longipinene was improved 77.1%. Applying the optimized conditions, the yields of the main products were 54.2, 34.2, and 47.2 mg L, corresponding to efficiencies of 82.1, 51.8, and 71.5% for the conversion of (+)-α-longipinene, (-)-isolongifolene, and α-humulene, respectively, at a 200 mL scale. These products were characterized as 12-hydroxy-α-longipinene, isolongifolene-9-one, and 5-hydroxy-α-humulene, respectively, by nuclear magnetic resonance spectroscopy.