In this work we describe development and testing of a novel pair of environmental primers targeting fhcD, a conserved gene in the H4MTP-linked C1-transfer pathway, and demonstrate that these primers enable confident detection of a broad variety of fhcD genes originating from phylogenetically diverse bacteria. The new primer pair was employed to analyse fhcD diversity in Lake Washington sediment, uncovering the presence of 40 fhcD phylotypes. Based on phylogenetic analyses, the phylotypes identified were affiliated with alpha-, beta- and gamma-proteobacteria, and Planctomycetes, while a number of sequences formed deep branches suggesting the presence of unknown groups of microorganisms. To assess the physiological potential and the possible substrate repertoire of the fhcD-containing species in Lake Washington, we conducted enrichments of natural populations on a variety of C1 substrates, and observed specific shifts in community structure in response to different C1 substrates. A specific shift in community structure was also observed in the presence of humic acids suggesting that C1 transfer metabolism linked to H4MPT may be part of the degradation pathway for this natural polymer, possibly involving formaldehyde production. Overall, our data suggest that C1 oxidation reactions linked to H4MPT are much more widespread in natural environments than previously thought.