Bile salts such as cholate are surface-active steroid compounds with functions for digestion and signaling in vertebrates. Upon excretion into soil and water bile salts are an electron- and carbon-rich growth substrate for environmental bacteria. Degradation of bile salts proceeds via intermediates with a 3-keto-Δ -diene structure of the steroid skeleton as shown for e.g. Pseudomonas spp. Recently, we isolated bacteria degrading cholate via intermediates with a 3-keto-7-deoxy-Δ -structure of the steroid skeleton suggesting the existence of a second pathway for cholate degradation. This potential new pathway was investigated with Novosphingobium sp. strain Chol11. A 7α-hydroxysteroid dehydratase encoded by hsh2 was identified, which was required for the formation of 3-keto-7-deoxy-Δ -metabolites. A hsh2 deletion mutant could still grow with cholate but showed impaired growth. Cholate degradation of this mutant proceeded via 3-keto-Δ -diene metabolites. Heterologous expression of Hsh2 in the bile salt-degrading Pseudomonas sp. strain Chol1 led to the formation of a dead-end steroid with a 3-keto-7-deoxy-Δ -diene structure. Hsh2 is the first steroid dehydratase with an important function in a metabolic pathway of bacteria that use bile salts as growth substrates. This pathway contributes to a broad metabolic repertoire of Novosphingobium strain Chol11 that may be advantageous in competition with other bile salt-degrading bacteria.