Methylobacterium sp. strain CM4, an aerobic methylotrophic ␣-proteobacterium, is able to grow with chloromethane as a carbon and energy source. Mutants of this strain that still grew with methanol, methylamine, or formate, but were unable to grow with chloromethane, were previously obtained by miniTn5 mutagenesis. The transposon insertion sites in six of these mutants mapped to two distinct DNA fragments. The sequences of these fragments, which extended over more than 17 kb, were determined. Sequence analysis, mutant properties, and measurements of enzyme activity in cell-free extracts allowed the definition of a multistep pathway for the conversion of chloromethane to formate. The methyl group of chloromethane is first transferred by the protein CmuA (cmu: chloromethane utilization) to a corrinoid protein, from where it is transferred to H 4 folate by CmuB. Both CmuA and CmuB display sequence similarity to methyltransferases of methanogenic archaea. In its C-terminal part, CmuA is also very similar to corrinoid-binding proteins, indicating that it is a bifunctional protein consisting of two domains that are expressed as separate polypeptides in methyl transfer systems of methanogens. The methyl group derived from chloromethane is then processed by means of pterinelinked intermediates to formate by a pathway that appears to be distinct from those already described in Methylobacterium. Remarkable features of this pathway for the catabolism of chloromethane thus include the involvement of a corrinoiddependent methyltransferase system for dehalogenation in an aerobe and a set of enzymes specifically involved in funneling the C1 moiety derived from chloromethane into central metabolism.