Pseudomonas mendocina KR1 grows on toluene as a sole carbon and energy source. A multicomponent oxygenase was partially purified from toluene-grown cells and separated into three protein components. The reconstituted enzyme system, in the presence of NADH and Fe2+, oxidized toluene to p-cresol as the first detectable product. Experiments with p-deutero-toluene led to the isolation of p-cresol which retained 68% of the deuterium initially present in the parent molecule. When the reconstituted enzyme system was incubated with toluene in the presence of 18O2, the oxygen in p-cresol was shown to be derived from molecular oxygen. The results demonstrate that P. mendocina KR1 initiates degradation of toluene by a multicomponent enzyme system which has been designated toluene-4-monooxygenase.