A novel flavoprotein that catalyses the NADPH-dependent oxidation of 4-hydroxyacetophenone to 4-hydroxyphenyl acetate, was purified to homogeneity from Pseudomonas fluorescens ACB. Characterization of the purified enzyme showed that 4-hydroxyacetophenone monooxygenase (HAPMO) is a homodimer of approximately 140 kDa with each subunit containing a noncovalently bound FAD molecule. HAPMO displays a tight coupling between NADPH oxidation and substrate oxygenation. Besides 4-hydroxyacetophenone a wide range of other acetophenones are readily converted via a Baeyer-Villiger rearrangement reaction into the corresponding phenyl acetates. The P. fluorescens HAPMO gene (hapE) was characterized. It encoded a 640 amino-acid protein with a deduced mass of 71 884 Da. Except for an N-terminal extension of approximately 135 residues, the sequence of HAPMO shares significant similarity with two known types of Baeyer-Villiger monooxygenases: cyclohexanone monooxygenase (27-33% sequence identity) and steroid monooxygenase (33% sequence identity). The HAPMO sequence contains several sequence motifs indicative for the presence of two Rossman fold domains involved in FAD and NADPH binding. The functional role of a recently identified flavoprotein sequence motif (ATG) was explored by site-directed mutagenesis. Replacement of the strictly conserved glycine (G490) resulted in a dramatic effect on catalysis. From a kinetic analysis of the G490A mutant it is concluded that the observed sequence motif serves a structural function which is of importance for NADPH binding.