Cytochrome P450 enzymes broadly exist in animals, plants and microorganisms. This superfamily of monooxygenases holds the greatest diversity of substrate structures and catalytic reaction types among all enzymes. P450 enzymes play important roles in natural product biosynthesis. In particular, P450 enzymes are capable of catalyzing the regio- and stereospecific oxidation of non-activated C-H bonds in complex organic compounds under mild conditions, which overrides many chemical catalysts. This advantage thus warrants their great potential in microbial drug development. In this review, we introduce a variety of P450 enzymes involved in natural product biosynthesis; provide a brief overview on protein engineering, biotransformation and practical application of P450 enzymes; and discuss the limits, challenges and prospects of industrial application of P450 enzymes.