The Rhodococcus jostii RHA1 gene cluster required for ␥-resorcylate (GRA) catabolism was characterized. The cluster includes tsdA, tsdB, tsdC, tsdD, tsdR, tsdT, and tsdX, which encode GRA decarboxylase, resorcinol 4-hydroxylase, hydroxyquinol 1,2-dioxygenase, maleylacetate reductase, an IclR-type regulator, a major facilitator superfamily transporter, and a putative hydrolase, respectively. The tsdA gene conferred GRA decarboxylase activity on Escherichia coli. Purified TsdB oxidized NADH in the presence of resorcinol, suggesting that tsdB encodes a unique NADH-specific single-component resorcinol 4-hydroxylase. Mutations in either tsdA or tsdB resulted in growth deficiency on GRA. The tsdC and tsdD genes conferred hydroxyquinol 1,2-dioxygenase and maleylacetate reductase activities, respectively, on E. coli. Inactivation of tsdT significantly retarded the growth of RHA1 on GRA. The growth retardation was partially suppressed under acidic conditions, suggesting the involvement of tsdT in GRA uptake. Reverse transcription-PCR analysis revealed that the tsd genes constitute three transcriptional units, the tsdBADC and tsdTX operons and tsdR. Transcription of the tsdBADC and tsdTX operons was induced during growth on GRA. Inactivation of tsdR derepressed transcription of the tsdBADC and tsdTX operons in the absence of GRA, suggesting that tsd gene transcription is negatively regulated by the tsdR-encoded regulator. Binding of TsdR to the tsdR-tsdB and tsdT-tsdR intergenic regions was inhibited by the addition of GRA, indicating that GRA interacts with TsdR as an effector molecule.