P450 represents a large group of heme-thiolate enzymes that exhibit remarkably diverse activities for the metabolism of numerous endogenous and exogenous chemicals. Recent site-directed mutagenesis studies indicate that a single mutation at any of the key residues can be enough to alter the substrate and/or product specificities in the P450 activities. Molecular modeling predicts that these key residues are located within the substrate heme pocket. Structural elements involved in diversifying P450 activity appear to correspond to the B' helix, the F helix and the F/G interhelical loop in the bacterial P450s. Structures represented by these regions are extremely variable despite the fact that the core of the P450 substrate pocket is well conserved. A mutation within these regions may result in a significant geometrical alteration of the pocket and lead to diversify the P450 activity. Phylogenetical analysis shows a relatively high rate of nonsynonymous substitution within these substrate binding regions. The functional versatility of P450 can thus be largely accounted for in terms of pocket change brought about by rapid mutations.