Coumarins are well known secondary metabolites widely found in various plants. However, the degradation of these compounds in the environment has not been studied in detail, and, especially, the initial stages of the catabolic pathways of coumarins are not fully understood. A soil isolate Pseudomonas mandelii 7HK4 is able to degrade 7-hydroxycoumarin (umbelliferone) via the formation of 3-(2,4-dihydroxyphenyl)propionic acid, but the enzymes catalyzing the α-pyrone ring transformations have not been characterized. To elucidate an upper pathway of the catabolism of 7-hydroxycoumarin, 7-hydroxycoumarin-inducible genes hcdD, hcdE, hcdF, and hcdG were identified by RT-qPCR analysis. The DNA fragment encoding a putative alcohol dehydrogenase HcdE was cloned, and the recombinant protein catalyzed the NADPH-dependent reduction of 7-hydroxycoumarin both in vivo and in vitro. The reaction product was isolated and characterized as a 7-hydroxy-3,4-dihydrocoumarin based on HPLC-MS and NMR analyses. In addition, the HcdE was active towards 6,7-dihydroxycoumarin, 6-hydroxycoumarin, 6-methylcoumarin and coumarin. Thus, in contrast to the well-known fact that the ene-reductases usually participate in the reduction of the double bond, an alcohol dehydrogenase catalyzing such reaction has been identified, and, for P. mandelii 7HK4, 7-hydroxycoumarin degradation via a 7-hydroxy-3,4-dihydrocoumarin pathway has been proposed.