Cytochrome P450 (CYP) 3A4 is responsible for the oxidative degradation of more than 50% of clinically used drugs. By means of molecular dynamics simulations with the newly developed force field parameters for the heme-thiolate group and its dioxygen adduct, we examine the differences in structural and dynamic properties between CYP3A4 in the resting form and its complexes with the substrate progesterone and the inhibitor metyrapone. The results indicate that the broad substrate specificity of CYP3A4 stems from the malleability of a loop (residues 211-218) that resides in the vicinity of the channel connecting the active site and bulk solvent. However, the high-amplitude motion of the flexible loop is found to be damped out upon binding of the inhibitor or the substrate in the active site. In the resting form of CYP3A4, a structural water molecule is bound to the sixth coordination position of the heme iron, stabilizing the octahedral coordination geometry. In addition to the direct coordination of metyrapone to the heme iron, the hydrogen bond interaction between the inhibitor carbonyl group and the side chain of Ser119 also contributes significantly to stabilizing the CYP3A4-metyrapone complex. On the other hand, progesterone is stabilized in the active site by the formation of two hydrogen bonds with Ser119 and Arg106, as well as by the van der Waals interactions with the heme and hydrophobic residues. The structural and dynamic features of the CYP3A4-progesterone complex indicate that the oxidative degradation of progesterone occurs through hydroxylation at the C16 position by the reactive oxygen coordinated to the heme iron.