Cholesterol is a ubiquitous hydrocarbon compound that can serve as substrate for microbial growth. This steroid and related cyclic compounds are recalcitrant due to their low solubility in water, complex ring structure, the presence of quaternary carbon atoms, and the low number of functional groups. Aerobic metabolism therefore makes use of reactive molecular oxygen as co-substrate of oxygenases to hydroxylate and cleave the sterane ring system. Consequently, anaerobic metabolism must substitute oxygenase-catalyzed steps by O(2)-independent hydroxylases. Here we show that one of the initial reactions of anaerobic cholesterol metabolism in the β-proteobacterium Sterolibacterium denitrificans is catalyzed by an unprecedented enzyme that hydroxylates the tertiary C25 atom of the side chain without molecular oxygen forming a tertiary alcohol. This steroid C25 dehydrogenase belongs to the dimethyl sulfoxide dehydrogenase molybdoenzyme family, the closest relative being ethylbenzene dehydrogenase. It is a heterotrimer, which is probably located at the periplasmic side of the membrane and contains one molybdenum cofactor, five [Fe-S] clusters, and one heme b. The draft genome of the organism contains several genes coding for related enzymes that probably replace oxygenases in steroid metabolism.