Mycobacterium neoaurum strains can transform phytosterols to 4-androstene-3,17-dione (4-AD), a key intermediate for the synthesis of advanced steroidal medicines. In this work, we presented the complete genome sequence of the M. neoaurum strain HGMS2, which transforms β-sitosterol to 4-AD. Through genome annotation, a phytosterol-degrading pathway in HGMS2 was predicted and further shown to form a 9,10-secosteroid intermediate by five groups of enzymes. These five groups of enzymes included three cholesterol oxidases (ChoM; group 1: ChoM1, ChoM2 and Hsd), two monooxygenases (Mon; group 2: Mon164 and Mon197), a set of enzymes for side-chain degradation (group 3), one 3-ketosteroid-1,2-dehydrogenase (KstD; group 4: KstD211) and three 3-ketosteroid-9a-hydroxylases (Ksh; group 5: KshA226, KshA395 and KshB122). A gene cluster encoding Mon164, KstD211, KshA226, KshB122 and fatty acid β-oxidoreductases constituted one integrated metabolic pathway, while genes encoding other key enzymes were sporadically distributed. All key enzymes except those from group 3 were prepared as recombinant proteins and their activities were evaluated, and the proteins exhibited distinct activities compared with enzymes identified from other bacterial species. Importantly, we found that the KstD211 and KshA395 enzymes in the HGMS2 strain retained weak activities and caused the occurrence of two major impurities, i.e., 1,4-androstene-3,17-dione (ADD) and 9-hydroxyl-4-androstene-3,17-dione (9OH-AD) during β-sitosterol fermentation. The concurrence of these two 4-AD analogs not only lowered 4-AD production yield but also hampered 4-AD purification. HGMS2 has the least number of genes encoding KstD and Ksh enzymes compared with current industrial strains. Therefore, HGMS2 could be a potent strain by which the 4-AD production yield could be enhanced by disabling the KstD211 and KshA395 enzymes. Our work also provides new insight into the engineering of the HGMS2 strain to produce ADD and 9OH-AD for industrial application.