DL-Tetrahydrofolate (THF) and ATP were necessary for the anaerobic O-demethylation of phenylmethylethers in cell extracts of the type strain (ATCC 29683) of the homoacetogen Acetobacterium woodii. The reactants for this enzymatic activity have not been previously demonstrated in any system, nor has the mediating enzyme been studied. An assay using reaction mixtures containing 1 mM THF, 2 mM ATP, and 2 mM hydroferulate (i.e., 4-hydroxy,3-methoxyphenylpropionate) was developed and was performed under stringent anaerobic conditions. Pyridine nucleotides and several other possible cofactors were tested but had no effect on the activity. After centrifugation of disrupted cells at 27,000 x g, the activity was found primarily in the supernatant, which had a specific activity of 14.2 +/- 0.5 nmol/min/mg of protein. At saturating levels of each of the other two substrates, apparent Km values for the variable substrate were 0.65 mM hydroferulate, 0.27 mM ATP, and 0.17 mM THF. Activity was significantly decreased when extract was preincubated at 60 degrees C and was completely lost after preincubation in air for 30 min. Thus, the soluble anaerobic O-demethylating enzyme system of A. woodii is oxygen sensitive. The THF- and ATP-dependent activity measurable in the soluble fraction of cell extracts constituted about 34% of the activity seen with intact cells.