Most microbes in the biosphere remain unculturable. Whole genome shotgun (WGS) sequencing of environmental DNA (metagenomics) can be used to study the genetic and metabolic properties of natural microbial communities. However, in communities of high complexity, metagenomics fails to link specific microbes to specific ecological functions. To overcome this limitation, we developed a method to target microbial subpopulations by labeling DNA through stable isotope probing (SIP), followed by WGS sequencing. Metagenome analysis of microbes from Lake Washington in Seattle that oxidize single-carbon (C1) compounds shows specific sequence enrichments in response to different C1 substrates, revealing the ecological roles of individual phylotypes. We also demonstrate the utility of our approach by extracting a nearly complete genome of a novel methylotroph, Methylotenera mobilis, reconstructing its metabolism and conducting genome-wide analyses. This high-resolution, targeted metagenomics approach may be applicable to a wide variety of ecosystems.