A cytochrome P450BM3-catalyzed reaction system linked by a two-step cofactor regeneration was investigated in a cell-free system. The two-step cofactor regeneration of redox cofactors, NADH and NADPH, was constructed by NAD(+)-dependent bacterial glycerol dehydrogenase (GLD) and bacterial soluble transhydrogenase (STH) both from Escherichia coli. In the present system, the reduced cofactor (NADH) was regenerated by GLD from the oxidized cofactor (NAD(+)) using glycerol as a sacrificial cosubstrate. The reducing equivalents were subsequently transferred to NADP(+) by STH as a cycling catalyst. The resultant regenerated NADPH was used for the substrate oxidation catalyzed by cytochrome P450BM3. The initial rate of the P450BM3-catalyzed reaction linked by the two-step cofactor regeneration showed a slight increase (approximately twice) when increasing the GLD units 10-fold under initial reaction conditions. In contrast, a 10-fold increase in STH units resulted in about a 9-fold increase in the initial reaction rate, implying that transhydrogenation catalyzed by STH was the rate-determining step. In the system lacking the two-step cofactor regeneration, 34% conversion of 50 mu M of a model substrate (p-nitrophenoxydecanoic acid) was attained using 50 mu M NADPH. In contrast, with the two-step cofactor regeneration, the same amount of substrate was completely converted using 5 mu M of oxidized cofactors (NAD(+) and NADP(+)) within 1 h. Furthermore, a 10-fold dilution of the oxidized cofactors still led to approximately 20% conversion in 1 h. These results indicate the potential of the combination of GLD and STH for use in redox cofactor recycling with catalytic quantities of NAD(+) and NADP(+). (c) 2009 American Institute of Chemical Engineers Biotechnol. Prog., 25: 1372-1378, 2009