The cytochromes P450 (P450s or CYPs) constitute a large heme enzyme superfamily, members of which catalyze the oxidative transformation of a wide range of organic substrates, and whose functions are crucial to xenobiotic metabolism and steroid transformation in humans and other organisms. The P450 peroxygenases are a subgroup of the P450s that have evolved in microbes to catalyze the oxidative metabolism of fatty acids, using hydrogen peroxide as an oxidant rather than NAD(P)H-driven redox partner systems typical of the vast majority of other characterized P450 enzymes. Early members of the peroxygenase (CYP152) family were shown to catalyze hydroxylation at the α and β carbons of medium-to-long-chain fatty acids. However, more recent studies on other CYP152 family P450s revealed the ability to oxidatively decarboxylate fatty acids, generating terminal alkenes with potential applications as drop-in biofuels. Other research has revealed their capacity to decarboxylate and to desaturate hydroxylated fatty acids to form novel products. Structural data have revealed a common active site motif for the binding of the substrate carboxylate group in the peroxygenases, and mechanistic and transient kinetic analyses have demonstrated the formation of reactive iron-oxo species (compounds I and II) that are ultimately responsible for hydroxylation and decarboxylation of fatty acids, respectively. This short review will focus on the biochemical properties of the P450 peroxygenases and on their biotechnological applications with respect to production of volatile alkenes as biofuels, as well as other fine chemicals.