A protein fraction exhibiting 1-hydroxy-2-naphthoic acid (1-H2NA) dioxygenase activity was purified via ion exchange, hydrophobic interactions, and gel filtration chromatography from Arthrobacter phenanthrenivorans sp. nov. strain Sphe3 isolated from a Greek creosote-oil-polluted site. Matrix-assisted laser desorption ionization-time of flight mass spectrometry (MALDI-TOF MS) and tandem MS (MS-MS) analysis revealed that the amino acid sequences of oligopeptides of the major 45-kDa protein species, as analyzed by SDS-PAGE and silver staining, comprising 29% of the whole sequence, exhibited strong homology with 1-H2NA dioxygenase of Nocardioides sp. strain KP7. A BLAST search of the recently sequenced Sphe3 genome revealed two putative open reading frames, named diox1 and diox2, showing 90% nucleotide identity to each other and 85% identity at the amino acid level with the Nocardia sp. homologue. diox1 was found on an indigenous Sphe3 plasmid, whereas diox2 was located on the chromosome. Both genes were induced by the presence of phenanthrene used as a sole carbon and energy source, and as expected, both were subject to carbon catabolite repression. The relative RNA transcription level of the chromosomal (diox2) gene was significantly higher than that of its plasmid (diox1) homologue. Both diox1 and diox2 putative genes were PCR amplified, cloned, and overexpressed in Escherichia coli. Recombinant E. coli cells expressed 1-H2NA dioxygenase activity. Recombinant enzymes exhibited Michaelis-Menten kinetics with an apparent K(m) of 35 muM for Diox1 and 29 muM for Diox2, whereas they showed similar kinetic turnover characteristics with K(cat)/K(m) values of 11 x 10(6) M(-1) s(-1) and 12 x 10(6) M(-1) s(-1), respectively. Occurrence of two diox1 and diox2 homologues in the Sphe3 genome implies that a replicative transposition event has contributed to the evolution of 1-H2NA dioxygenase in A. phenanthrenivorans.