In flavocytochrome P450 BM3, there is a conserved phenylalanine residue at position 393 (Phe393), close to Cys400, the thiolate ligand to the heme. Substitution of Phe393 by Ala, His, Tyr, and Trp has allowed us to modulate the reduction potential of the heme, while retaining the structural integrity of the enzyme's active site. Substrate binding triggers electron transfer in P450 BM3 by inducing a shift from a low- to high-spin ferric heme and a 140 mV increase in the heme reduction potential. Kinetic analysis of the mutants indicated that the spin-state shift alone accelerates the rate of heme reduction (the rate determining step for overall catalysis) by 200-fold and that the concomitant shift in reduction potential is only responsible for a modest 2-fold rate enhancement. The second step in the P450 catalytic cycle involves binding of dioxygen to the ferrous heme. The stabilities of the oxy-ferrous complexes in the mutant enzymes were also analyzed using stopped-flow kinetics. These were found to be surprisingly stable, decaying to superoxide and ferric heme at rates of 0.01-0.5 s(-1). The stability of the oxy-ferrous complexes was greater for mutants with higher reduction potentials, which had lower catalytic turnover rates but faster heme reduction rates. The catalytic rate-determining step of these enzymes can no longer be the initial heme reduction event but is likely to be either reduction of the stabilized oxy-ferrous complex, i.e., the second flavin to heme electron transfer or a subsequent protonation event. Modulating the reduction potential of P450 BM3 appears to tune the two steps in opposite directions; the potential of the wild-type enzyme appears to be optimized to maximize the overall rate of turnover. The dependence of the visible absorption spectrum of the oxy-ferrous complex on the heme reduction potential is also discussed.