Photosynthetic whole-cell biocatalysts are promising platforms for direct manufacturing of photo voltaic chemical compounds. Right here, we employed the inexperienced microalga Chlamydomonas reinhardtii (hereafter Chlamydomonas) as a heterologous host for the cyclohexanone monooxygenase (CHMO) enzyme that converts exogenously added cyclohexanone to ε-caprolactone by utilising photosynthetically produced molecular oxygen (O2) and nicotinamide adenine dinucleotide phosphate (NADPH). As well as, the innate functionality of Chlamydomonas to photoproduce molecular hydrogen (H2) was utilised in a one-pot stepwise manufacturing of H2 and ε-caprolactone. H2 photoproduction catalysed by innate O2-sensitive [Fe-Fe]-hydrogenase was facilitated by preliminary microoxic circumstances and progressively declined attributable to accumulation of photosynthetic O2. This was accompanied by the biotransformation of cyclohexanone to ε-caprolactone by the heterologous CHMO. The optimum circumstances for the formation of ε-caprolactone had been the presence of acetate within the medium (mixotrophia), comparatively low mild depth (26 µmol photons m-2 s-1) and addition of a low quantity of ethanol [1.7% (vol/vol)]. The latter inhibits the innate alcohol dehydrogenase (ADH) that competes with CHMO for the substrate, cyclohexanone. The formation of ε-caprolactone was additional improved by introducing a sign sequence on the N-terminus of CHMO that directs the enzyme to the chloroplast enriched each with photosynthetic NADPH and O2, thus exploiting the compartmentalised nature of Chlamydomonas cell sturucture. This method presents new alternatives for photosynthetic inexperienced chemical compounds manufacturing.