Degradation of the cholesterol side-chain in Mycobacterium tuberculosis is initiated by two cytochromes P450, CYP125A1 and CYP142A1, that sequentially oxidize C26 to the alcohol, aldehyde and acid metabolites. Here we report characterization of the homologous enzymes CYP125A3 and CYP142A2 from Mycobacterium smegmatis mc2 155. Heterologously expressed, purified CYP125A3 and CYP142A2 bound cholesterol, 4-cholesten-3-one, and antifungal azole drugs. CYP125A3 or CYP142A2 reconstituted with spinach ferredoxin and ferredoxin reductase efficiently hydroxylated 4-cholesten-3-one to the C-26 alcohol and subsequently to the acid. The X-ray structures of both substrate-free CYP125A3 and CYP142A2 and of cholest-4-en-3-one-bound CYP142A2 reveal significant differences in the substrate binding sites compared with the homologous M. tuberculosis proteins. Deletion only of cyp125A3 causes a reduction of both the alcohol and acid metabolites and a strong induction of cyp142 at the mRNA and protein levels, indicating that CYP142A2 serves as a functionally redundant back up enzyme for CYP125A3. In contrast to M. tuberculosis, the M. smegmatis Δcyp125Δcyp142 double mutant retains its ability to grow on cholesterol albeit with a diminished capacity, indicating an additional level of redundancy within its genome.