Hydroxylamine-derived reagents have enabled versatile nitrene transfer reactions for introducing nitrogen-containing functionalities in small-molecule catalysis, as well as biocatalysis. These reagents, however, result in a poor atom economy and stoichiometric organic waste. Activating hydroxylamine (NH2OH) for nitrene transfer offers a low-cost and sustainable route to amine synthesis, since water is the sole byproduct. Despite its presence in nature, hydroxylamine is not known to be used for enzymatic nitrogen incorporation in biosynthesis. Here, we report an engineered heme enzyme that can utilize hydroxylammonium chloride, an inexpensive commodity chemical, for nitrene transfer. Directed evolution of Pyrobaculum arsenaticum protoglobin generated efficient enzymes for benzylic C-H primary amination and styrene aminohydroxylation. Mechanistic studies supported a stepwise radical pathway involving rate-limiting hydrogen atom transfer. This unprecedented activity is a useful addition to the "nitrene transferase" repertoire and hints at possible future discovery of natural enzymes that use hydroxylamine for amination chemistry.