Biphenyl dioxygenase is the enzyme that catalyzes the stereospecific dioxygenation of the aromatic ring. This enzyme has attracted the attention of researchers due to its ability to oxidize polychlorinated biphenyls, which is one of the serious environmental contaminants. We determined the crystal structure of the terminal oxygenase component of the biphenyl dioxygenase (BphA1A2) derived from Rhodococcus strain sp. RHA1 in substrate-free and complex forms. These crystal structures revealed that the substrate-binding pocket makes significant conformational changes upon substrate binding to accommodate the substrate into the pocket. Our analysis of the crystal structures suggested that the residues in the substrate-binding pocket can be classified into three groups, which, respectively, seem to be responsible for the catalytic reaction, the orientation/conformation of the substrate, and the conformational changes of the substrate-binding pocket. The cooperative actions of residues in the three groups seem to determine the substrate specificity of the enzyme.