The facultative methylotroph Methylobacterium extorquens AM1 possesses two pterin-dependent pathways for C(1) transfer between formaldehyde and formate, the tetrahydrofolate (H(4)F)-linked pathway and the tetrahydromethanopterin (H(4)MPT)-linked pathway. Both pathways are required for growth on C(1) substrates; however, mutants defective for the H(4)MPT pathway reveal a unique phenotype of being inhibited by methanol during growth on multicarbon compounds such as succinate. It has been previously proposed that this methanol-sensitive phenotype is due to the inability to effectively detoxify formaldehyde produced from methanol. Here we present a comparative physiological characterization of four mutants defective in the H(4)MPT pathway and place them into three different phenotypic classes that are concordant with the biochemical roles of the respective enzymes. We demonstrate that the analogous H(4)F pathway present in M. extorquens AM1 cannot fulfill the formaldehyde detoxification function, while a heterologously expressed pathway linked to glutathione and NAD(+) can successfully substitute for the H(4)MPT pathway. Additionally, null mutants were generated in genes previously thought to be essential, indicating that the H(4)MPT pathway is not absolutely required during growth on multicarbon compounds. These results define the role of the H(4)MPT pathway as the primary formaldehyde oxidation and detoxification pathway in M. extorquens AM1.