Let U(r(1)) denote the enveloping algebra of the two-dimensional nonabelian Lie algebra r(1) over a base field K. We study the maximal abelian ad-nilpotent (mad) associative subalgebras and finite-dimensional Lie subalgebras of U(r(1)). We first prove that the set of noncentral elements of U(r(1)) admits the Dixmier partition, U(r(1)) − K = 5 i=1 i , and establish characterization theorems for elements in i , i = 1, 3, 4. Then we determine the elements in i , i = 1, 3, and describe the eigenvalues for the inner derivation ad B x, x ∈ i , i = 3, 4. We also derive other useful results for elements in i , i = 2, 3, 4, 5.As an application, we find all framed mad subalgebras of U(r(1)) and determine all finite-dimensional nonabelian Lie algebras that can be realized as Lie subalgebras of U(r(1)). We also study the realizations of the Lie algebra r(1) in U(r(1)) in detail.2000 Mathematics subject classification: primary 17A36, 17B35; secondary 17B60.