Enzyme-based chemical transformations typically proceed with high selectivity under mild conditions, and are becoming increasingly important in the pharmaceutical and chemical industries. Cytochrome P450 monooxygenases (P450s) constitute a large family of enzymes of particular interest in this regard. Their biological functions, such as detoxification of xenobiotics and steroidogenesis, are based on the ability to catalyse the insertion of oxygen into a wide variety of compounds. Such a catalytic transformation might find technological applications in areas ranging from gene therapy and environmental remediation to the selective synthesis of pharmaceuticals and chemicals. But relatively low turnover rates (particularly towards non-natural substrates), low stability and the need for electron-donating cofactors prohibit the practical use of P450s as isolated enzymes. Here we report the directed evolution of the P450 from Pseudomonas putida to create mutants that hydroxylate naphthalene in the absence of cofactors through the 'peroxide shunt' pathway with more than 20-fold higher activity than the native enzyme. We are able to screen efficiently for improved mutants by coexpressing them with horseradish peroxidase, which converts the products of the P450 reaction into fluorescent compounds amenable to digital imaging screening. This system should allow us to select and develop mono- and di-oxygenases into practically useful biocatalysts for the hydroxylation of a wide range of aromatic compounds.