We have previously reported that a cell-free extract prepared from Geobacillus thermodenitrificans UZO 3 reductively cleaves diaryl ether bonds of 2,3,7,8-tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD), a dioxin with the highest toxicity, in a sequential fashion producing 3’,4’,4,5-tetrachloro-2-hydroxydiphenyl ether (TCDE) as the intermediate, and 3,4-dichlorophenol (DCP) as the final reaction product (1). The detection of TCDE implicated the discovery of an unprecedented dioxin-degrading enzyme that reductively cleaves the diaryl ether bonds. In this study, we report the cloning and sequencing of the dioxin reductive etherase gene dreE which codes for the 2,3,7,8-TCDD-degrading enzyme. We showed that dreE was expressed in Escherichia coli and that the product of the expression could reductively cleave diaryl ether bonds of 2,3,7,8-TCDD to produce TCDE. Furthermore, we established that the amino acid sequence encoded by dreE was homologous to an enzyme with yet unknown function that is encoded by a gene located in the riboflavin (vitamin B2) biosynthesis operon in Bacillus subtilis. We also showed that the amino acid sequence possesses a coenzyme A (CoA) binding site that is conserved in the N-acyltransferase superfamily. For the first time, the degradation of 2,3,7,8-TCDD at the molecular level using a enzyme of bacterial origin has been demonstrated.