Biodegradation of synthetic compounds has been studied extensively, but the metabolic diversity required for catabolism of many natural compounds has not been addressed. 5-Nitroanthranilic acid (5NAA), produced in soil by Streptomyces scabies, is also the starting material for synthetic dyes and other nitroaromatic compounds. Bradyrhizobium JS329 was isolated from soil by selective enrichment with 5NAA. When grown on 5NAA, the isolate released stoichiometric amounts of nitrite and half of the stoichiometric amounts of ammonia. Enzyme assays indicate that the initial step in 5NAA degradation is an unusual hydrolytic deamination for formation of 5-nitrosalicylic acid (5NSA). Cloning and heterologous expression revealed the genes that encode 5NAA deaminase (naaA) and the 5NSA dioxygenase (naaB) that cleaves the aromatic ring of 5NSA without prior removal of the nitro group. The results provide the first clear evidence for the initial steps in biodegradation of amino-nitroaromatic compounds and reveal a novel deamination reaction for aromatic amines.