The first two steps in the catabolism of 4-hydroxybenzoate by the ascomycetous yeast Candida parapsilosis CBS604 were investigated. In contrast to the well-known bacterial pathways and to what was previously assumed, metabolism of 4-hydroxybenzoate in C. parapsilosis proceeds through initial oxidative decarboxylation to give 1,4-dihydroxybenzene. This reaction is catalyzed by a NAD(P)H and FAD-dependent 4-hydroxybenzoate 1-hydroxylase. Further metabolism of 1,4-dihydroxybenzene to the ring-fission substrate 1,2,4-trihydroxybenzene is catalyzed by a NADPH-specific FAD-dependent aromatic hydroxylase acting on phenolic compounds. 19F-NMR experiments with cell extracts and 2-fluoro-4-hydroxybenzoate as the model compound confirm this metabolic pathway and exclude the alternative pathway proceeding through initial 3-hydroxylation followed by oxidative decarboxylation in the second step.