1. The first metabolic step in the biodegradation of 4-hydroxypyridine by an Agrobacterium sp. was hydroxylation to form pyridine-3,4-diol. 2. Extracts required 1mol of O(2) and 1mol of NADH or NADPH for the conversion of 4-hydroxypyridine into pyridine-3,4-diol, suggesting that the enzyme responsible, 4-hydroxypyridine-3-hydroxylase, was a mixed function mono-oxygenase. 3. After treatment with acidic (NH(4))(2)SO(4) the enzyme required FAD for activity; FMN and riboflavin would not substitute for FAD. 4. The rate of anaerobic reduction of FAD by NAD(P)H was increased more than tenfold in the presence of 4-hydroxypyridine, suggesting that the mechanism of hydroxylation was similar to that of other aromatic hydroxylases which are of the mono-oxygenase type. 5. The partially purified enzyme was extremely specific for its heterocyclic substrate but would utilize either NADH or NADPH. 6. 4-Hydroxypyridine-3-hydroxylase was strongly inhibited by high substrate concentration (above 0.5mm) especially below pH7.5. 8. The inflexion at pH8.4 in a pK(m) versus pH plot, together with strong inhibition by p-chloromercuribenzoate, suggested a role for thiol groups in substrate binding.