The heme domain of cytochrome P450 116B5 from Acinetobacter radioresistens (P450 116B5hd), a self-sufficient class VII P450, was functionally expressed in Escherichia coli, purified and characterised in active form. Its unusually high reduction potential (-144 ± 42 mV) and stability in the presence of hydrogen peroxide make this enzyme a good candidate for driving catalysis with the so-called peroxide shunt, avoiding the need for a reductase and the expensive cofactor NAD(P)H. The enzyme is able to carry out the peroxide-driven hydroxylation of aromatic compounds such as p-nitrophenol (K = 128.85 ± 29.51 μM and k = 2.65 ± 0.14 min), 10-acetyl-3,7-dihydroxyphenoxazine (K = 6.01 ± 0.32 μM and k = 0.33 ± 0.03 min), and 3,5,3',5'tetramethylbenzidine (TMB). Moreover, it catalyses different reactions on well-known drugs such as hydroxylation of diclofenac (K = 49.60 ± 6.30 μM and k = 0.06 ± 0.01 min) and N-desmethylation of tamoxifen (K = 57.20 ± 7.90 μM and k = 0.79 ± 0.04 min). The data demonstrate that P450 116B5hd is an efficient biocatalyst for sustainable applications in bioremediation and human drug metabolite production.