Cytochrome P450 (P450) enzymes are found in all kingdoms of life, catalysing a wide range of biosynthetic and metabolic processes. They are, in fact, of particular interest in a variety of applications such as the design of agents for the inhibition of a particular P450 to combat pathogens or the engineering of enzymes to produce a particular activity. Bacterial P450BM3 is of particular interest as it is a self-sufficient multi-domain protein with high reaction rates and a primary structure and function similar to mammalian isoforms. It is an attractive enzyme to study due to its potential for engineering catalysts with fast reaction rates which selectively produce molecules of high value.In order to study this enzyme in detail and characterise intermediate species and reactions, the first step was to design a general hybrid quantum mechanical /molecular mechanics (QM/MM) computational method for their investigation. Two QM/MM approaches were developed and tested against existing experimental and theoretical data and were then applied to subsequent investigations.The dissociation of water from the water-bound resting state was scrutinised to determine the nature of the spin conversion that occurs during this transformation. A displacement of merely 0.5 A from the starting state was found to trigger spin crossing, with no requirement for the presence of a substrate or large conformational changes in the enzyme.A detailed investigation of the sulfoxidation reaction was undertaken to establish the nature of the oxidant species. Both reactions involving Compound 0 (Cpd0) and Compound I (CpdI) confirmed a concerted pathway proceeding via a single-state reactivity mechanism. As the reaction involving Cpd0 was found to be unrealistically high, the reaction proceeds preferentially via the quartet state of CpdI. This QM/MM study revealed that the preferred spin-state and the transition state structure for sulfoxidation are influenced by the protein environment. P450cam and P450BM3 were found to have CpdI species with different Fe-S distances and spin density distributions, and the latter having a larger reaction barrier for sulfoxidation.A novel P450 species, the doubly-reduced pentacoordinated system, was characterised using gas-phase and QM/MM methods. It was discovered to have a heme radical coupled to two unpaired electrons on the iron centre, making it the only P450 species to have similar characteristics to CpdI. Calculated spectroscopic parameters may assist experimentalists in the identification of the elusive CpdI.