The suitability of dimethyl ether as a C1 compound was examined with the obligate methylobacterium Methylococcus capsulatus (Texas). The ether did not support growth and was not formed during growth on methane; it was an inhibitor of growth and oxidation of methane and a poor oxidation substrate for cell suspensions. NADH stimulation of methane, but not dimethyl ether, oxidation occurred in cell extracts.