Biosynthesis of the anticancer drug Taxol in yew species involves eight cytochrome P450-mediated oxygenations and four coenzyme A-dependent acylations of the diterpenoid core. A family of cytochrome P450 genes, obtained from a yew cell cDNA library, were functionally expressed and screened with taxusin (taxa-4(20),11(12)-dien-5 alpha,9 alpha,10 beta,13 alpha-tetraol tetraacetate) as a surrogate substrate. One clone converted this substrate to an oxygenated derivative that was identified as 7 beta-hydroxytaxusin. The structure and properties of this 7 beta-hydroxylase are similar to those of other taxoid hydroxylases. Kinetic and binding assays indicated selectivity of the 7 beta-hydroxylase for polyoxygenated and acylated taxoid substrates, an observation consistent with the operation of this enzyme in the central portion of the Taxol biosynthetic pathway. Although the 7 beta-hydroxyl of Taxol is not essential for antimitotic activity, this functional group provides a convenient means for preparing taxoid derivatives.