Sterol 14alpha-demethylase encoded by CYP51 is a member of the cytochrome P450 (CYP) superfamily of enzymes and has been shown to have an essential role in sterol biosynthesis in eukaryotes, with orthologues recently being described in some bacteria. Examination of the genome sequence data for the proteobacterium Methylococcus capsulatus, a bacterial species known to produce sterol, revealed the presence of a single CYP with strong homology to CYP51, particularly to a form in Mycobacterium tuberculosis. This M. capsulatus CYP51 protein represents a new class of CYP consisting of the CYP domain naturally fused to a ferredoxin domain at the C terminus via an alanine-rich linker. Expression of the M. capsulatus MCCYP51FX fusion in Escherichia coli yielded a P450, which, when purified to homogeneity, had the predicted molecular mass approximately 62 kDa on SDS/PAGE and bound lanosterol as a putative substrate. Sterol 14alpha-demethylase activity was shown (0.24 nmol of lanosterol metabolized per minute per nanomole of MCCYP51FX fusion) by gas chromatography/mass spectrometry with the activity dependent upon the presence of ferredoxin reductase and NADPH. Our unique findings describe a new class of naturally existing cytochrome P450, which will provide pivotal information for CYP structure/function in general.