4-Hydroxyisoleucine (HIL) found in fenugreek seeds has insulinotropic and anti-obesity effects and is expected to be a novel orally active drug for insulin-independent diabetes. Here, we show that the newly isolated strain Bacillus thuringiensis 2e2 and the closely related strain B. thuringiensis ATCC 35646 operate a novel metabolic pathway for L-isoleucine (L-Ile) via HIL and 2-amino-3-methyl-4-ketopentanoic acid (AMKP). The HIL synthesis was catalyzed stereoselectively by an α-ketoglutaric acid-dependent dioxygenase and to be useful for efficient production of a naturally occurring HIL isomer, (2S,3R,4S)-HIL. The (2S,3R,4S)-HIL was oxidized to (2S,3R)-AMKP by a NAD(+)-dependent dehydrogenase. The metabolic pathway functions as an effective bypass pathway that compensates for the incomplete tricarboxylic acid (TCA) cycle in Bacillus species and also explains how AMKP, a vitamin B(12) antimetabolite with antibiotic activity, is synthesized. These novel findings pave a new way for the commercial production of HIL and also for AMKP.