The initial enzyme of ethylbenzene metabolism in denitrifying Azoarcus strain EbN1, ethylbenzene dehydrogenase, was purified and characterized. The soluble periplasmic enzyme is the first known enzyme oxidizing a nonactivated hydrocarbon without molecular oxygen as cosubstrate. It is a novel molybdenum/iron-sulfur/heme protein of 155 kDa, which consists of three subunits (96, 43, and 23 kDa) in an alphabetagamma structure. The N-terminal amino acid sequence of the alpha subunit is similar to that of other molybdenum proteins such as selenate reductase from the related species Thauera selenatis. Ethylbenzene dehydrogenase is unique in that it oxidizes the hydrocarbon ethylbenzene, a compound without functional groups, to (S)-1-phenylethanol. Formation of the product was evident by coupling to an enantiomer-specific (S)-1-phenylethanol dehydrogenase from the same organism. The apparent K(m) of the enzyme for ethylbenzene is very low at <2 microm. Oxygen does not affect ethylbenzene dehydrogenase activity in extracts but inactivates the purified enzyme, if the heme b cofactor is in the reduced state. A variant of ethylbenzene dehydrogenase exhibiting significant activity also with the homolog n-propylbenzene was detected in a related Azoarcus strain (PbN1).