Toluene and related aromatic compounds are anaerobically degraded by the denitrifying bacterium Thauera sp. strain K172 via oxidation to benzoyl-CoA. The postulated initial step is methylhydroxylation of toluene to benzyl alcohol, which is either a free or enzyme-bound intermediate. Cells grown with toluene or benzyl alcohol contained benzyl alcohol dehydrogenase, which is possibly the second enzyme in the proposed pathway. The enzyme was purified from benzyl-alcohol-grown cells and characterized. It has many properties in common with benzyl alcohol dehydrogenase from Acinetobacter and Pseudomonas species. The enzyme was active as a homotetramer of 160 kDa, with subunits of 40 kDa. It was NAD(+)-specific, had an alkaline pH optimum, and was inhibited by thiol-blocking agents. No evidence for a bound cofactor was obtained. Various benzyl alcohol analogues served as substrates, whereas non-aromatic alcohols were not oxidized. The N-terminal amino acid sequence indicates that the enzyme belongs to the class of long-chain Zn(2+)-dependent alcohol dehydrogenases, although it appears not to contain a metal ion that can be removed by complexing agents.