The pathogenic yeast Candida parapsilosis degrades various hydroxy derivatives of benzenes and benzoates by the gentisate and 3-oxoadipate pathways. We identified the genes MNX1, MNX2, MNX3, GDX1, HDX1 and FPH1 that code for enzymes involved in these pathways in the complete genome sequence of C. parapsilosis. Next, we demonstrated that MNX1, MNX2, MNX3 and GDX1 are inducible and transcriptionally controlled by hydroxyaromatic substrates present in cultivation media. Our results indicate that MNX1 and MNX2 code for flavoprotein monooxygenases catalysing the first steps in the 3-oxoadipate and gentisate pathways, respectively (i.e. 4-hydroxybenzoate 1-hydroxylase and 3-hydroxybenzoate 6-hydroxylase). Moreover, we found that the two pathways differ by their intracellular localization. The enzymes of the 3-oxoadipate pathway, Mnx1p and Mnx3p, localize predominantly in the cytosol. In contrast, intracellular localization of the components of the gentisate pathway, Mnx2p and Gdx1p, depends on the substrate in the cultivation medium. In cells growing on glucose these proteins localize in the cytosol, whereas in media containing hydroxyaromatic compounds they associate with mitochondria. Finally, we showed that the overexpression of MNX1 or MNX2 increases the tolerance of C. parapsilosis cells to the antifungal drug terbinafine.