N-Demethylation of many xenobiotics and naturally occurring purine alkaloids such as caffeine and theobromine is primarily catalysed in higher organisms, ranging from fungi to mammals, by the well-studied membrane-associated cytochrome P450s. In contrast, there is no well-characterized enzyme for N-demethylation of purine alkaloids from bacteria, despite several reports on their utilization as sole source of carbon and nitrogen. Here, we provide what we believe to be the first detailed characterization of a purified N-demethylase from Pseudomonas putida CBB5. The soluble N-demethylase holoenzyme is composed of two components, a reductase component with cytochrome c reductase activity (Ccr) and a two-subunit N-demethylase component (Ndm). Ndm, with a native molecular mass of 240 kDa, is composed of NdmA (40 kDa) and NdmB (35 kDa). Ccr transfers reducing equivalents from NAD(P)H to Ndm, which catalyses an oxygen-dependent N-demethylation of methylxanthines to xanthine, formaldehyde and water. Paraxanthine and 7-methylxanthine were determined to be the best substrates, with apparent K
m and kcat
values of 50.4±6.8 μM and 16.2±0.6 min−1, and 63.8±7.5 μM and 94.8±3.0 min−1, respectively. Ndm also displayed activity towards caffeine, theobromine, theophylline and 3-methylxanthine, all of which are growth substrates for this organism. Ndm was deduced to be a Rieske [2Fe–2S]-domain-containing non-haem iron oxygenase based on (i) its distinct absorption spectrum and (ii) significant identity of the N-terminal sequences of NdmA and NdmB with the gene product of an uncharacterized caffeine demethylase in P. putida IF-3 and a hypothetical protein in Janthinobacterium sp. Marseille, both predicted to be Rieske non-haem iron oxygenases.