Whereas enzymatic asymmetric carbene N–H insertion is a powerful method for preparation of chiral amines in principle, it has suffered from limited enantioselectivity in practice. In this work, we demonstrate that engineered cytochrome P450 enzymes can catalyze this abiological C–N bond-forming reaction with excellent activity and selectivity (up to 32,100 TTN, >99% yield and 98% e.e.) to prepare a series of bioactive α-amino lactones, which have not been accessed previously using a carbene insertion strategy. The enzymes are dual-function catalysts, effecting both carbene transfer and enantioselective proton-transfer catalysis, in a single active site. To gain insight into the mechanism of the enzymatic transformation, especially in the asymmetric protonation step, we performed extensive molecular dynamics simulations and density functional theory (DFT) calculations. Computational studies uncover the important roles of active-site residues that enable high activity and selectivity through interacting with the carbene intermediate and the amine substrate, and directing water molecules for selective proton transfer.