Biodegradation of 1,4-dioxane (dioxane) contamination has gained much attention for decades. In our previous work, we isolated a highly efficient dioxane degrader, Xanthobacter sp. YN2, but the underlying mechanisms of its extraordinary degradation performance remained unresolved. In this study, we performed a comparative transcriptome analysis of YN2 grown on dioxane and citrate to elucidate its genetic degradation mechanism and investigated the transcriptomes of different dioxane degradation stages (T0, T24, T48). We also analyzed the transcriptional response of YN2 over time during which the carbon source switched from citrate to dioxane. The results indicate that strain YN2 was a methylotroph, which provides YN2 a major advantage as a pollutant degrader. A large number of genes involved in dioxane metabolism were constitutively expressed prior to dioxane exposure. Multiple genes related to the catabolism of each intermediate were upregulated by treatment in response to dioxane. Glyoxylate metabolism was essential during dioxane degradation by YN2, and the key intermediate glyoxylate was metabolized through three routes: glyoxylate carboligase pathway, malate synthase pathway, and anaplerotic ethylmalonyl–CoA pathway. Genes related to quorum sensing and transporters were significantly upregulated during the early stages of degradation (T0, T24) prior to dioxane depletion, while the expression of genes encoding two-component systems was significantly increased at late degradation stages (T48) when total organic carbon in the culture was exhausted. This study is the first to report the participation of genes encoding glyoxalase, as well as methylotrophic genes xoxF and mox, in dioxane metabolism. The present study reveals multiple genetic and transcriptional strategies used by YN2 to rapidly increase biomass during growth on dioxane, achieve high degradation efficiency and tolerance, and adapt to dioxane exposure quickly, which provides useful information regarding the molecular basis for efficient dioxane biodegradation.