The cyp102A2 and cyp102A3 genes encoding the two Bacillus subtilis homologues (CYP102A2 and CYP102A3) of flavocytochrome P450 BM3 (CYP102A1) from Bacillus megaterium have been cloned, expressed in Escherichia coli, purified, and characterized spectroscopically and enzymologically. Both enzymes contain heme, flavin adenine dinucleotide (FAD) and flavin mononucleotide (FMN) cofactors and bind a variety of fatty acid molecules, as demonstrated by conversion of the low-spin resting form of the heme iron to the high-spin form induced by substrate-binding. CYP102A2 and CYP102A3 catalyze the fatty acid-dependent oxidation of reduced nicotinamide adenine dinucleotide phosphate (NADPH) and reduction of artificial electron acceptors at high rates. Binding of carbon monoxide to the reduced forms of both enzymes results in the shift of the heme Soret band to 450 nm, confirming the P450 nature of the enzymes. Reverse-phase high-performance liquid chromatography (HPLC) of products from the reaction of the enzymes with myristic acid demonstrates that both catalyze the subterminal hydroxylation of this substrate, though with different regioselectivity and catalytic rate. Both P450s 102A2 and 102A3 show kinetic and binding preferences for long-chain unsaturated and branched-chain fatty acids over saturated fatty acids, indicating that the former two molecule types may be the true substrates. P450s 102A2 and 102A3 exhibit differing substrate selectivity profiles from each other and from P450 BM3, indicating that they may fulfill subtly different cellular roles. Titration curves for binding and turnover kinetics of several fatty acid substrates with P450s 102A2 and 102A3 are better described by sigmoidal (rather than hyperbolic) functions, suggesting binding of more than one molecule of substrate to the P450s, or possibly cooperativity in substrate binding. Comparison of the amino acid sequences of the three flavocytochromes shows that several important amino acids in P450 BM3 are not conserved in the B. subtilis homologues, pointing to differences in the binding modes for the substrates that may explain the unusual sigmoidal kinetic and titration properties.