E. coli (P450pyrTM-GDH) with dual plasmids, pETDuet containing P450pyr triple mutant I83H/M305Q/A77S (P450pyrTM) and ferredoxin reductase (FdR) genes and pRSFDuet containing glucose dehydrogenase (GDH) and ferredoxin (Fdx) genes, was engineered to show a high activity (12.7 U g⁻¹ cdw) for the biohydroxylation of N-benzylpyrrolidine 1 and a GDH activity of 106 U g⁻¹ protein. The E. coli cells were used as efficient biocatalysts for highly regio- and stereoselective hydroxylation of alicyclic substrates at non-activated carbon atom with enhanced productivity via intracellular recycling of NAD(P)H. Hydroxylation of N-benzylpyrrolidine 1 with resting cells in the presence of glucose showed excellent regio- and stereoselectivity, giving (S)-N-benzyl-3-hydroxypyrrolidine 2 in 98% ee as the sole product in 9.8 mM. The productivity is much higher than that of the same biohydroxylation using E. coli (P450pyrTM)b without expressing GDH. E. coli (P450pyrTM-GDH) was found to be highly regio- and stereoselective for the hydroxylation of N-benzylpyrrolidin-2-one 3, improving the regioselectivity from 90% of the wild-type P450pyr to 100% and giving (S)-N-benzyl-4-hydroxylpyrrolidin-2-one 4 in 99% ee as the sole product. A high activity of 15.5 U g⁻¹ cdw was achieved and (S)-4 was obtained in 19.4 mM. E. coli (P450pyrTM-GDH) was also found to be highly regio- and stereoselective for the hydroxylation of N-benzylpiperidin-2-one 5, increasing the ee of the product (S)-N-benzyl-4-hydroxy-piperidin-2-one 6 to 94% from 33% of the wild-type P450pyr. A high activity of 15.8 U g⁻¹ cdw was obtained and (S)-6 was produced in 3.3 mM as the sole product. E. coli (P450pyrTM-GDH) represents the most productive system known thus far for P450-catalyzed hydroxylations with cofactor recycling, and the hydroxylations with E. coli (P450pyrTM-GDH) provide with simple and useful syntheses of (S)-2, (S)-4, and (S)-6 that are valuable pharmaceutical intermediates and difficult to prepare.