The enzymology of methanol utilization in thermotolerant methylotrophic Bacillus strains was investigated. In all strains an immunologically related NAD-dependent methanol dehydrogenase was involved in the initial oxidation of methanol. In cells of Bacillus sp. C1 grown under methanol-limiting conditions this enzyme constituted a high percentage of total soluble protein. The methanol dehydrogenase from this organism was purified to homogeneity and characterized. In cell-free extracts the enzyme displayed biphasic kinetics towards methanol, with apparent Km values of 3.8 and 166 mM. Carbon assimilation was by way of the fructose-1,6-bisphosphate aldolase cleavage and transketolase/transaldolase rearrangement variant of the RuMP cycle of formaldehyde fixation. The key enzymes of the RuMP cycle, hexulose-6-phosphate synthase (HPS) and hexulose-6-phosphate isomerase (HPI), were present at very high levels of activity. Failure of whole cells to oxidize formate, and the absence of formaldehyde- and formate dehydrogenases indicated the operation of a non-linear oxidation sequence for formaldehyde via HPS. A comparison of the levels of methanol dehydrogenase and HPS in cells of Bacillus sp. C1 grown on methanol and glucose suggested that the synthesis of these enzymes is not under coordinate control.