Distinct isoflavone O-methyltransferases (IOMTs) from Streptomyces species were isolated and expressed using S. avermitilis host system. Previously reported isoflavone 7-O-methyltransferases (I7OMTs, E.C. 126.96.36.199) and two putative O-methyltransferases (OMTs) from Saccharopolyspora erythraea were selected by comparative sequence grouping and expressed in S. avermitilisΔSaOMT2 under the control of constitutive ermE promoter. During whole-cell biotransformation of 4′,7-dihydroxyisoflavone (daidzein) by constructed recombinant strains, production of O-methylated daidzein was investigated. S. avermitilisΔSaOMT2::SeOMT3 (SeOMT3) produced 7-methoxy-4′-hydroxyisoflavone (7-OMD) with 4.5% of low conversion yield due to competitive oxidation reactions. However, SeOMT3 could produce a novel 4′,7-dihydroxy-3′-methoxyisoflavone (3′-OMD) (<1%) resulted from subsequent 3′-O-methylation of 3′,4′,7-trihydroxyisoflavone (3′-OHD) which was a hydroxylated product catalyzed by oxygenases. Although external addition of SAM did not change the conversion yield of O-methylation reaction, co-expression of SAM synthetase gene (metK) with SeOMT3 greatly induced the regiospecific O-methylation reaction at 3′-hydroxyl group with final conversion of 12.1% using 0.1 mM of daidzein. Biotechnol. Bioeng. 2013;110: 2591–2599. © 2013 Wiley Periodicals, Inc.