A highly sought after reaction in chemical synthesis is the activation of unactivated carbon-hydrogen bonds. We demonstrate the hydroxylation of fatty acids using an engineered thermostable archaeal cytochrome P450 enzyme. By replacing a seven amino acid section of the I-helix, the nicotinamide cofactor-dependent monooxygenase was converted into a hydrogen peroxide using peroxygenase, enabling the efficient biocatalytic oxidation of C-H bonds at room temperature to 90 °C.