We studied the degradation of toluene for bacteria isolated from hypoxic (i.e., oxygen-limited) petroleum-contaminated aquifers and compared such strains with other toluene degraders. Three Pseudomonas isolates, P. pickettii PKO1, Pseudomonas sp. strain W31, and P. fluorescens CFS215, grew on toluene when nitrate was present as an alternate electron acceptor in hypoxic environments. We examined kinetic parameters (K(m) and Vmax) for catechol 2,3-dioxygenase (C230), a key shared enzyme of the toluene-degradative pathway for these strains, and compared these parameters with those for the analogous enzymes from archetypal toluene-degrading pseudomonads which did not show enhanced, nitrate-dependent toluene degradation. C230 purified from strains W31, PKO1, and CFS215 had a significantly greater affinity for oxygen as well as a significantly greater rate of substrate turnover than found for the analogous enzymes from the TOL plasmid (pWW0) of Pseudomonas putida PaW1, from Pseudomonas cepacia G4, or from P. putida F1. Analysis of the nucleotide and deduced amino acid sequences of C23O from strain PKO1 suggests that this extradiol dioxygenase belongs to a new cluster within the subfamily of C23Os that preferentially cleave monocyclic substrates. Moreover, deletion analysis of the nucleotide sequence upstream of the translational start of the meta-pathway operon that contains tbuE, the gene that encodes the C230 of strain PKO1, allowed identification of sequences critical for regulated expression of tbuE, including a sequence homologous to the ANR-binding site of Pseudomonas aeruginosa PAO. When present in cis, this site enhanced expression of tbuE under oxygen-limited conditions. Taken together, these results suggest the occurrence of a novel group of microorganisms capable of oxygen-requiring but nitrate-enhanced degradation of benzene, toluene, ethylbenzene, and xylenes in hypoxic environments. Strain PKO1, which exemplifies this novel group of microorganisms, compensates for a low-oxygen environment by the development of an oxygen-requiring enzyme with kinetic parameters favorable to function in hypoxic environments, as well as by elevating synthesis of such an enzyme in response to oxygen limitation.