This review discusses the mechanisms of oxygen activation by cytochrome P450 enzymes, the possible catalytic roles of the various iron--oxygen species formed in the catalytic cycle, and progress in understanding the mechanisms of hydrocarbon hydroxylation, heteroatom oxidation, and olefin epoxidation. The focus of the review is on recent results, but earlier work is discussed as appropriate. The literature through to February 2002 is surveyed, and 175 referenced are cited.