Bioconversion of various substituted naphthalenes that contain 1-methoxy- and 1-ethoxy-naphthalenes, methylnaphthalenes, dimethylnaphthalenes, and naphthalenecarboxylic acid methyl esters were performed using recombinant Escherichia coli cells, which expressed the gene coding for a cytochrome P450 BM3 variant F87V (P450 BM3 (F87V)) that was N-terminally fused to an archaeal peptidyl-prolyl cis-trans isomerase. In addition, bioconversion experiments with the same substrates were carried out using those that expressed the phnA1A2A3A4 genes for a polycyclic aromatic hydrocarbon (PAH)-dihydroxylating dioxygenase, which originated from a PAH-utilizing marine bacterium Cycloclasticus sp. strain A5. Consequently, a variety of mono-hydroxylated derivatives were generated from these substituted naphthalenes. Oxidative aryl coupling was found to produce a novel compound 4,4'-diethoxy-[2,2']-binaphthalenyl-1,1'-diol from 1-ethoxynaphthalene with the E. coli cells expressing the P450 BM3 (F87V) gene. This recombinant E. coli was further shown to introduce the hydroxyl group regio- and stereo-specifically into a sesquiterpene beta-eudesmol.