Alkylbenzene-degrading Rhodococcus sp. strain DK17 is able to utilize phthalate and terephthalate as growth substrates. The genes encoding the transformation of phthalate and terephthalate to protocatechuate are organized as two separate operons, located 6.7kb away from each other. Interestingly, both the phthalate and terephthalate operons are induced in response to terephthalate while expression of the terephthalate genes is undetectable in phthalate-grown cells. In addition to two known plasmids (380-kb pDK1 and 330-kb pDK2), a third megaplasmid (750-kb pDK3) was newly identified in DK17. The phthalate and terephthalate operons are duplicated and are present on both pDK2 and pDK3. RT-PCR experiments, coupled with sequence analysis, suggest that phthalate and terephthalate degradation in DK17 proceeds through oxygenation at carbons 3 and 4 and at carbons 1 and 2 to form 3,4-dihydro-3,4-dihydroxyphthalate and 1,2-dihydro-1,2-dihydroxyterephthalate, respectively. The 3,4-dihydroxyphthalate pathway was further corroborated through colorometric tests. Apparently, the two dihydrodiol metabolites are subsequently dehydrogenated and decarboxylated to form protocatechuate, which is further degraded by a protocatechuate 3,4-dioxygenase as confirmed by a ring-cleavage enzyme assay.