Molecular evolution is a powerful tool for improving or changing activities of enzymes for their use in biotechnological processes. Cytochromes P450 are highly interesting enzymes for biotechnological purposes because they are able to hydroxylate a broad variety of substrates with high regio- and stereoselectivity. One promising steroid hydroxylating cytochrome P450 for biotechnological applications is CYP106A2 from Bacillus megaterium ATCC 13368. It is one of a few known bacterial cytochromes P450 able to transform steroids such as progesterone and 11-deoxycortisol. CYP106A2 can be easily expressed in Escherichia coli with a high yield and can be reconstituted using the adrenal redox proteins, adrenodoxin and adrenodoxin reductase. We developed a simple screening assay for this system and performed random mutagenesis of CYP106A2, yielding variants with improved 11-deoxycortisol and progesterone hydroxylation activity. After two generations of directed evolution, we were able to improve the k (cat)/K (m) of the 11-deoxycortisol hydroxylation by a factor of more than four. At the same time progesterone conversion was improved about 1.4-fold. Mapping the mutations identified in catalytically improved CYP106A2 variants into the structure of a CYP106A2 model suggests that these mutations influence the mobility of the F/G loop, and the interaction with the redox partner adrenodoxin. The results show the evolution of a soluble steroid hydroxylase as a potential new catalyst for the production of steroidogenic compounds.