Abstract Reconstitution of a selective demethylation system for lanosterol is desperately needed for more efficient synthesis of steroidal drugs. Sterol 14α-demethylase cytochrome P450 (CYP51) has been confirmed to catalyze sterol 14α-demethylation, an essential reaction in sterol biosynthesis. Herein, a putative CYP51 gene (RtCYP51) was mined from the complete genome sequence of Rhodococcus triatomae BKS 15-14. Its amino acid sequence showed 25–68% identity to other sterol 14α-demethylases, and contained a novel alanine-rich sequence at the C-terminus. Heterologous expression of the RtCYP51 gene in Escherichia coli (E. coli) yielded a ∼54 kDa recombination protein that exhibited a typical reduced CO-difference spectrum and a dissociation constant (Kd) of 2.93 μM for lanosterol. Furthermore, three exogenous electron donor systems, including Fdx-FdR (Acinetobacter sp.OC4 ferredoxin and ferredoxin reductase), Fld-FdR2 (E. coli flavodoxin and flavodoxin reductase) and NfFdR (Nocardia farcinica iron-sulfur containing NADPH-P450 reductase) were selected for coupling the electron-transfer from the coenzyme to RtCYP51. Fdx-FdR was found to be the most efficient electron donor and was also confirmed to support the lanosterol demethylation activity of RtCYP51 in vitro. Under the optimum molar ratio of RtCYP51/FdR/Fdx (1:2:10), RtCYP51 exhibited a relatively high turnover number of 0.63 min−1 (nmol metabolized lanosterol/min/nmol RtCYP51), compared with known bacterial CYP51s.