Steroidal glycoalkaloids (SGAs) are toxic specialized metabolites that are found in the Solanaceae. Potato (Solanum tuberosum) contains the SGAs α-solanine and α-chaconine, while tomato (Solanum lycopersicum) contains α-tomatine, all of which are biosynthesized from cholesterol. However, although two cytochrome P450 monooxygenases that catalyze the 22- and 26-hydroxylation of cholesterol have been identified, the 16-hydroxylase remains unknown. Feeding with deuterium-labeled cholesterol indicated that the 16α- and 16β-hydrogen atoms of cholesterol were eliminated to form α-solanine and α-chaconine in potato, while only the 16α-hydrogen atom was eliminated in α-tomatine biosynthesis, suggesting that a single oxidation at C-16 takes place during tomato SGA biosynthesis while a two-step oxidation occurs in potato. Here, we show that a 2-oxoglutarate-dependent dioxygenase, designated as 16DOX, is involved in SGA biosynthesis. We found that the transcript of potato 16DOX (St16DOX) was expressed at high levels in the tuber sprouts, where large amounts of SGAs are accumulated. Biochemical analysis of the recombinant St16DOX protein revealed that St16DOX catalyzes the 16α-hydroxylation of hydroxycholesterols and that (22S)-22,26-dihydroxycholesterol was the best substrate among the nine compounds tested. St16DOX-silenced potato plants contained significantly lower levels of SGAs, and a detailed metabolite analysis revealed that they accumulated the glycosides of (22S)-22,26-dihydroxycholesterol. Analysis of the tomato 16DOX (Sl16DOX) gene gave essentially the same results. These findings clearly indicate that 16DOX is a steroid 16α-hydroxylase that functions in the SGA biosynthetic pathway. Furthermore, St16DOX silencing did not affect potato tuber yield, indicating that 16DOX may be a suitable target for controlling toxic SGA levels in potato.