This review focuses on the role and distribution in the environment of alkane hydroxylases and their (potential) applications in bioremediation and biocatalysis. Alkane hydroxylases play an important role in the microbial degradation of oil, chlorinated hydrocarbons, fuel additives, and many other compounds. Environmental studies demonstrate the abundance of alkane degraders and have lead to the identification of many new species, including some that are (near)-obligate alkanotrophs. The availability of a growing collection of alkane hydroxylase gene sequences now allows estimations of the relative abundance of the different enzyme systems and the distribution of the host organisms.