Methanogenic and sulfate-reducing Archaea are considered to have an energy metabolism involving C1 transfer coenzymes and enzymes unique for this group of strictly anaerobic microorganisms. An aerobic methylotrophic bacterium, Methylobacterium extorquens AM1, was found to contain a cluster of genes that are predicted to encode some of these enzymes and was shown to contain two of the enzyme activities and one of the methanogenic coenzymes. Insertion mutants were all unable to grow on C1 compounds, suggesting that the archaeal enzymes function in aerobic C1 metabolism. Thus, methylotrophy and methanogenesis involve common genes that cross the bacterial/archaeal boundaries.