The conversion of the heterocycle dibenzothiophene (DBT) by the agaric basidiomycetes Agrocybe aegerita and Coprinellus radians was studied in vivo and in vitro with whole cells and with purified extracellular peroxygenases, respectively. A. aegerita oxidized DBT (110 μM) by 100% within 16 days into eight different metabolites. Among the latter were mainly S-oxidation products (DBT sulfoxide, DBT sulfone) and in lower amounts, ring-hydroxylation compounds (e.g., 2-hydroxy-DBT). C. radians converted about 60% of DBT into DBT sulfoxide and DBT sulfone as the sole metabolites. In vitro tests with purified peroxygenases were performed to compare the product pattern with the metabolites formed in vivo. Using ascorbic acid as radical scavenger, a total of 19 and seven oxygenation products were detected after DBT conversion by the peroxygenases of A. aegerita (AaP) and C. radians (CrP), respectively. Whereas ring hydroxylation was favored over S-oxidation by AaP (again 2-hydroxy-DBT was identified), CrP formed DBT sulfoxide as major product. This finding suggests that fungal peroxygenases can considerably differ in their catalytic properties. Using H2 18O2, the origin of oxygen was proved to be the peroxide. Based on these results, we propose that extracellular peroxygenases may be involved in the oxidation of heterocycles by fungi also under natural conditions.