L-amino acid deaminase (LAAD) is a key enzyme in the deamination of L-valine (L-val) to produce α-ketoisovalerate (KIV). However, the product inhibition of LAAD is a major hindrance to industrial KIV production. In the present study, a combination strategy of modification of flexible loop regions around the product binding site and the avoidance of dramatic change of main-chain dynamics was reported to reduce the product inhibition. The four mutant PM-LAADM4 (PM-LAADS98A/T105A/S106A/L341A) achieved a 6.2-fold higher catalytic efficiency and an almost 6.7-fold reduction in product inhibition than the wild-type enzyme. Docking experiments suggested that weakened interactions between the product and enzyme, and the flexibility of the “lid” structure relieved LAAD product inhibition. Finally, the whole-cell biocatalyst PM-LAADM4 has been applied to KIV production, the titer and conversion rate of KIV from L-val were 98.5 g·L−1 and 99.2% at a 3-L scale, respectively. These results demonstrate that the newly engineered catalyst can significantly reduce the product inhibition, that making KIV a prospective product by bioconversion method, and also provide the understanding of the mechanism of the relieved product inhibition of PM-LAAD.