Arthrobacter sp. strain IF1 is able to grow on 4-fluorophenol (4-FP) as a sole source of carbon and energy. To clone the 4-FP degradation genes, DNA libraries were constructed and screened with a probe obtained by PCR using primers designed on the basis of conserved regions of aromatic two-component monooxygenases. Sequencing of positive clones yielded two gene clusters, each harboring a gene encoding a monooxygenase with high sequence similarity to the oxygenase component of 4-nitrophenol and 4-chlorophenol monooxygenase systems. Both these monooxygenase genes were differentially expressed during growth on 4-FP, as revealed by Northern blotting and reverse transcription-PCR. One cluster also contained a gene for a flavin reductase. The monooxygenase and reductase were purified from Escherichia coli cells expressing the corresponding genes, and together they catalyzed NADH-dependent hydroxylation and dehalogenation of 4-halophenols. The results indicate that strain IF1 transforms 4-FP to hydroquinone by a two-component monooxygenase system of which one component provides reduced flavin adenine dinucleotide at the expense of NADH and the other catalyzes para-hydroxylation of 4-FP and other 4-substituted phenols.