Cytochromes P450 catalyze the insertion of one O2-derived oxygen atom into an aliphatic or aromatic molecule. P450s are best known for the metabolism of xenobiotic molecules, where hydroxylation renders insoluble hydrocarbons more soluble for easier elimination. In addition to this important catabolic function, P450s catalyze key steps in steroid and plant growth regulator metabolism. A variety of therapeutic, fungicidal, and agochemical agents that perturb these metabolic pathways very likely operate by binding in the lipophilic P450 active site and coordinating with the heme iron atom. Recent determination of a bacterial P450 crystal structure, P450cam from Pseudomonas putida, in addition to the crystal structure of four inhibited complexes, has provided some insight into the potential use of P450 as a model system for the rational design of therapeutic agents. The crystal structure has also shed light on the P450 catalytic mechanism. P450cam operates differently from peroxidase or catalase in cleaving the O-O bond, since unlike these other enzymes, P450 contains no acid-base catalytic groups near the oxygen binding site. Instead, the O2 pocket is lined with aliphatic and aromatic residues. This strongly suggests that the catalytic push required to cleave the O-O bond resides with the ability of the Cys heme ligand to donate electron density to the heme-oxy system. A comparison of the substrate-free and -bound P450cam crystal structures has revealed some interesting aspects regarding the dynamics of substrate binding.(ABSTRACT TRUNCATED AT 250 WORDS)