Background: Steroids are lipophilic compounds with a gonane skeleton and play an important role in higher organisms. Due to different functionalizations - mainly hydroxylations - at the steroid molecule, they vary highly in their mode of action. The pharmaceutical industry is, therefore, interested in hydroxysteroids as therapeutic agents. The insertion of hydroxyl groups into a steroid core, however, is hardly accomplishable by classical chemical means; that is because microbial steroid hydroxylations are investigated and applied since decades. CYP106A2 is a cytochrome P450 monooxygenase from Bacillus megaterium ATCC 13368, which was first described in the late 1970s and which is capable to hydroxylate a variety of 3-oxo-delta4 steroids at position 15beta. CYP106A2 is a soluble protein, easy to express and to purify in high amounts, which makes this enzyme an interesting target for biotechnological purposes. Results: In this work a focused steroid library was screened in vitro for new CYP106A2 substrates using a reconstituted enzyme assay. Five new substrates were identified, including dehydroepiandrosterone and pregnenolone. NMR-spectroscopy revealed that both steroids are mainly hydroxylated at position 7beta. In order to establish a biotechnological system for the preparative scale production of 7beta-hydroxylated dehydroepiandrosterone, whole-cell conversions with growing and resting cells of B. megaterium ATCC1336 the native host of CYP1062 and also with resting cells of a recombinant B. megaterium MS941 strain overexpressing CYP106A2 have been conducted and conversion rates of 400 muM/h (115 mg/l/h) were obtained. Using the B. megaterium MS941 overexpression strain, the selectivity of the reaction was improved from 0.7 to 0.9 for 7beta-OH-DHEA. Conclusions: In this work we describe CYP106A2 for the first time as a regio-selective hydroxylase for 3-hydroxy-delta5 steroids. DHEA was shown to be converted to 7beta-OH-DHEA which is a highly interesting human metabolite, supposed to act as neuroprotective, anti-inflammatory and immune-modulatory agent. Optimization of the whole-cell system using different B. megaterium strains lead to a conversion of DHEA with B. megaterium showing high selectivity and conversion rates and displaying a volumetric yield of 103 mg/l/h 7beta-OH-DHEA.