The initial steps in the anaerobic oxidation of the aromatic hydrocarbon ethylbenzene by denitrifying bacteria are two sequential dehydrogenation reactions of ethylbenzene to (S)-1-phenylethanol and further to acetophenone. The enzyme catalysing the second oxidation step, (S)-1-phenylethanol dehydrogenase, was analysed in the denitrifying bacterium Azoarcus sp. strain EbN1. An NAD+-dependent 1-phenylethanol dehydrogenase for each of the enantiomers of 1-phenylethanol was identified in this bacterium; the two enzymes were induced under different growth conditions. (S)-1-phenylethanol dehydrogenase from ethylbenzene-grown cells was purified and biochemically characterised. The enzyme is a typical secondary alcohol dehydrogenase and consists of two subunits of 25.5 kDa. The enantioselective enzyme catalyses the oxidation of (S)-1-phenylethanol or the reduction of acetophenone and is inhibited by high concentrations of (R)-1-phenylethanol. The enzyme exhibits low apparent K(m) values for (S)-1-phenylethanol and acetophenone and is rather substrate-specific, using only a few chemically similar secondary alcohols, such as 1-phenylpropanol and isopropanol.