Agrocybe aegerita peroxidase (AaP) is a versatile extracellular biocatalyst that can oxygenate aromatic compounds. Here, we report on the selective oxidation of pyridine (PY) yielding pyridine N-oxide as sole product. Using H(2)(18)O(2) as co-substrate, the origin of oxygen was confirmed to be the peroxide. Therefore, AaP can be regarded as a true peroxygenase transferring one oxygen atom from peroxide to the substrate. To our best knowledge, there are only two types of enzymes oxidizing PY at the nitrogen: bacterial methane monooxygenase and a few P450 monooxygenases. AaP is the first extracellular enzyme and the first peroxidase that catalyzes this reaction, and it converted also substituted PYs into the corresponding N-oxides.