A gene from the marine bacterium Stenotrophomonas maltophilia encodes a 38.6 kDa FAD-containing flavoprotein (Uniprot B2FLR2) named S. maltophilia flavin-containing monooxygenase (SMFMO), which catalyses the oxidation of thioethers and also the regioselective Baeyer–Villiger oxidation of the model substrate bicyclo[3.2.0]hept-2-en-6-one. The enzyme was unusual in its ability to employ either NADH or NADPH as nicotinamide cofactor. The KM and kcat values for NADH were 23.7±9.1 μM and 0.029 s−1 and 27.3±5.3 μM and 0.022 s−1 for NADPH. However, kcat/KM value for the ketone substrate in the presence of 100 μM cofactor was 17 times greater for NADH than for NADPH. SMFMO catalysed the quantitative conversion of 5 mM ketone in the presence of substoichiometric concentrations of NADH with the formate dehydrogenase cofactor recycling system, to give the 2-oxa and 3-oxa lactone products of Baeyer–Villiger reaction in a ratio of 5:1, albeit with poor enantioselectivity. The conversion with NADPH was 15 %. SMFMO also catalysed the NADH-dependent transformation of prochiral aromatic thioethers, giving in the best case, 80 % ee for the transformation of p-chlorophenyl methyl sulfide to its R enantiomer. The structure of SMFMO reveals that the relaxation in cofactor specificity appears to be accomplished by the substitution of an arginine residue, responsible for recognition of the 2′-phosphate on the NADPH ribose in related NADPH-dependent FMOs, with a glutamine residue in SMFMO. SMFMO is thus representative of a separate class of single-component, flavoprotein monooxygenases that catalyse NADH-dependent oxidations from which possible sequences and strategies for developing NADH-dependent biocatalysts for asymmetric oxygenation reactions might be identified.