We have analyzed the effects of mutations inserted during directed evolution of a specialized enzyme, Escherichia coli S-1,2-propanediol oxidoreductase (FucO). The kinetic properties of evolved variants have been determined and the observed differences have been rationalized by modeling the tertiary structures of isolated variants and the wild-type enzyme. The native substrate, S-1,2-propanediol, as well as phenylacetaldehyde and 2S-3-phenylpropane-1,2-diol, which are new substrates accepted by isolated variants, were docked into the active sites. The study provides a comprehensive picture of how acquired catalytic properties have arisen via an intermediate generalist enzyme, which had acquired a single mutation (L259V) in the active site. Further mutagenesis of this generalist resulted in a new specialist catalyst. We have also been able to relate the native enzyme activities to the evolved ones and linked the differences to individual amino acid residues important for activity and selectivity. F254 plays a dual role in the enzyme function. First, mutation of F254 into an isoleucine weakens the interactions with the coenzyme thereby increasing its dissociation rate from the active site and resulting in a four-fold increase in turnover number with S-1,2-propanediol. Second, F254 is directly involved in binding of aryl-substituted substrates via π–π interactions. On the other hand, N151 is critical in determining the substrate scope since the side chain amide group stabilizes binding of 1,2-substituted diols and is apparently necessary for enzymatic activity with these substrates. Moreover, the side chain of N151 introduces steric hindrance, which prevents high activity with phenylacetaldehyde. Additionally, the hydroxyl group of T149 is required to maintain the catalytically important hydrogen bonding network.