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Phenylacetone monooxygenase (PAMO) from <jats:italic>Thermobifida<\/jats:italic> fusca with moderate thermostability catalyzes the oxidation of aryl ketone substrates, but is limited by high specificity and narrow substrate scope. In the present study, we applied loop optimization by loop swapping followed by focused saturation mutagenesis in order to evolve PAMO mutants capable of catalyzing the regioselective BV oxidation of cyclohexanone and cyclobutanone derivatives with formation of either normal or abnormal esters or lactones. We further modulated PAMO to increase enantioselectivity. Crystal structure studies indicate that rotation occurs in the NADP\u2010binding domain and that the high B\u2010factor region is predominantly distributed in the catalytic pocket residues. Computational analyses further revealed dynamic character in the catalytic pocket and reshaped hydrogen bond interaction networks, which is more favorable for substrate binding. 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