Methanol dehydrogenase (MDH), an NAD(+)-dependent oxidoreductase, reversibly converts formaldehyde to methanol. This activity is a key step for both toxic formaldehyde elimination and methanol production in bacterial methylotrophy. We mutated decameric Bacillus methanolicus MDH by directed evolution and screened mutants for increased formaldehyde reduction activity in Escherichia coli. The mutant with the highest formaldehyde reduction activity had three amino acid substitutions: F213V, F289L, and F356S. To identify the individual contributions of these residues to the increased reduction activity, the activities of mutant variants were evaluated. F213V/F289L and F213V/F289L/F356S showed 25.3- and 52.8-fold higher catalytic efficiency (k(cat)/K-m) than wild type MDH, respectively. In addition, they converted 5.9- and 6.4-fold more formaldehyde to methanol in vitro than the wild type enzyme. Computational modelling revealed that the three substituted residues were located at MDH oligomerization interfaces, and may influence oligomerization stability: F213V aids in dimer formation, and F289L and F356S in decamer formation. The substitutions may stabilise oligomerization, thereby increasing the formaldehyde reduction activity of MDH.