A recombinant Escherichia coli BL21 (DE3) strain overexpressing a variant of P450(BM-3) (V26T/R47F/A74G/F87V/L188K; abbreviated: BL21 (P450(BM-3) QM)) oxyfunctionalizes the bicyclic monoterpene alpha-pinene to alpha-pinene oxide, verbenol, and myrtenol. To address the low water solubility and the toxicity of terpenoids, an aqueous-organic two-phase bioprocess was developed. Diisononyl phthalate was selected as a biocompatible organic carrier solvent capable of masking the toxic effects mediated by alpha-pinene and of efficiently extracting the products enabling scale-up to the bioreactor. With an aqueous to organic phase ratio of 3:2 and 30% (v/v) of alpha-pinene in the organic phase, a biocatalytic product formation period of more than 4 h was achieved. A comparison of the biotransformation performance of BL21 (P450(BM-3) QM) and a strain with an additional heterologous NADPH regeneration system comprising glucose facilitator and dehydrogenase, but only expressing half the amount of P450(BM-3) QM, shows comparable product concentrations of 1,020 +/- 144 and 800 +/- 61 mg l (Aq) (-1) , respectively. The total product yields Y (P/P450) (A mu mol A mu mol (P450) (-1) ) were 80% higher when the strain with the cofactor regeneration system was used. A total product concentration of over 1 g l (Aq) (-1) , corresponding to the highest value reported for microbial alpha-pinene oxyfunctionalization so far, marks a promising step forward toward a future application of recombinant microorganisms for the selective oxidation of terpenoids to value-added products.