Microbial valorization of CO2-derived substrates has emerged as a promising approach to address climate change and resource scarcity. Formate, which can be efficiently produced from CO2, shows great potential as a sustainable feedstock for biotechnological production. However, the scope of formate assimilation pathways is restricted by the limited number of natural formate-assimilating enzymes. To overcome this limitation, several new-to-nature routes for formate assimilation based on its reduction to formaldehyde have been proposed, but they suffer from low catalytic efficiencies and cannot yet support bacterial growth. Here, we propose the Serine Shunt as a novel formate reduction route and demonstrate its activity in vivo. In this pathway, formate is attached to glycine to form serine, which is subsequently cleaved into formaldehyde and glycine, thereby effectively converting formate to formaldehyde. Unlike other formate reduction routes, the Serine Shunt mainly utilizes natural reactions with favorable enzyme kinetics, while requiring the same amount of ATP and NAD(P)H as the most efficient new-to-nature route. We implemented the Serine Shunt in engineered E. coli strains using a step-wise approach by dividing the pathway into metabolic modules. After validating the individual module activities, we demonstrated the in vivo activity of the complete Serine Shunt by measuring intracellular formaldehyde production with a GFP sensor and coupling its activity to cell growth. Our results indicate that the Serine Shunt could be applied as a novel formate reduction route in methylotrophic hosts relevant for biotechnology.