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Background: Biosynthesis of steroidal drugs is of great benefit in pharmaceutical manufacturing as the process involves efficient enzymatic catalysis at ambient temperature and atmospheric pressure compared to chemical synthesis. 3-ketosteroid-∆1-dehydrogenase from Arthrobacter simplex (KsdD3) catalyzes 1,2-desaturation of steroidal substrates with FAD as a cofactor. Results: Recombinant KsdD3 exhibited organic solvent tolerance. W117, F296, W299, et al., which were located in substrate-binding cavity, were predicted to form hydrophobic interaction with the substrate. Structure-based site-directed saturation mutagenesis of KsdD3 was performed with W299 mutants, which resulted in improved catalytic activities toward various steroidal substrates. W299A showed the highest increase in catalytic efficiency (kcat/Km) compared with the wild-type enzyme. Homology modelling revealed that the mutants enlarged the active site cavity and relieved the steric interference facilitating recognition of C17 hydroxyl/carbonyl steroidal substrates. Steered molecular dynamics simulations revealed that W299A/G decreased the potential energy barrier of association of substrates and dissociation of the corresponding products. The biotransformation of AD with enzymatic catalysis and resting cells harbouring KsdD3 WT/mutants revealed that W299A catalyzed the maximum ADD yields of 71 and 95% by enzymatic catalysis and resting cell conversion respectively, compared with the wild type (38 and 75%, respectively). Conclusions: The successful rational design of functional KsdD3 greatly advanced our understanding of KsdD family enzymes. Structure-based site-directed saturation mutagenesis and biochemical data were used to design KsdD3 mutants with a higher catalytic activity and broader selectivity. [ABSTRACT FROM AUTHOR]