The valorization of lignin is critical to establishing sustainable biorefineries as we transition away from petroleum-derived feedstocks. Advances in lignin fractionation and depolymerization are yielding new opportunities for the biocatalytic upgrading of lignin-derived aromatic compounds (LDACs) using microbial cell factories. Given their roles in lignin metabolism and their catalytic versatility, cytochromes P450 are attractive enzymes in engineering such biocatalysts. Here we highlight P450s that catalyze aromatic O-demethylation, a rate-limiting step in the conversion of LDACs to valuable chemicals, including efforts to engineer the specificity of these enzymes and to use them in developing biocatalysts. We also discuss broader opportunities at the intersection of biochemistry, structure-guided enzyme engineering, and metabolic engineering for application of P450s in the emerging area of microbial lignin valorization.