Highly substituted polychlorinated biphenyls (PCBs) are known to be very resistant to aerobic biodegradation, particularly the initial attack by biphenyl dioxygenase. Functional evolution of the substrate specificity of biphenyl dioxygenase was demonstrated by DNA shuffling and staggered extension process (StEP) of the bphA gene coding for the large subunit of biphenyl dioxygenase. Several variants with an extended substrate range for PCBs were selected. In contrast to the parental biphenyl dioxygenases from Burkholderia cepacia LB400 and Pseudomonas pseudoalcaligenes KF707, which preferentially recognize either ortho-(LB400) or para-(KF707) substituted PCBs, several variants degraded both congeners to about the same extent. These variants also exhibited superior degradation capabilities toward several tetra- and pentachlorinated PCBs as well as commercial PCB mixtures, such as Aroclor 1242 or Aroclor 1254. Sequence analysis confirmed that most variants contained at least four to six template switches. All desired variants contained the Thr335Ala and Phe336lle substitutions confirming the importance of this critical region in substrate specificity. These results suggest that the block-exchange nature of gene shuffling between a diverse class of dioxygenases may be the most useful approach for breeding novel dioxygenases for PCB degradation in the desired direction.