Arthrobacter oxydans P52 isolated from soil samples was found to degrade the phenylcarbamate herbicides phenmedipham and desmedipham cometabolically by hydrolyzing their central carbamate linkages. The phenylcarbamate hydrolase (phenmedipham hydrolase) responsible for the degradative reaction was purified to homogeneity. The enzyme was shown to be a monomer with a molecular weight of 55,000. A 41-kb wild-type plasmid (pHP52) was identified in A. oxydans P52, but not in a derivative of this strain that had spontaneously lost the ability to hydrolyze phenylcarbamates, indicating that the gene for phenylcarbamate degradation (pcd) is plasmid encoded. Determination of two partial amino acid sequences allowed the localization of the coding sequence of the pcd gene on a 3.3-kb PstI restriction fragment within pHP52 DNA by hybridization with synthetic oligonucleotides. The phenylcarbamate hydrolase was functionally expressed in Escherichia coli under control of the lacZ promoter after the 3.3-kb PstI fragment was subcloned into the vector pUC19. A stretch of 1,864 bases within the cloned Pst fragment was sequenced. Sequence analysis revealed an open reading frame of 1,479 bases containing the amino acid partial sequences determined for the purified enzyme. Sequence comparisons revealed significant homology between the pcd gene product and the amino acid sequences of esterases of eukaryotic origin. Subsequently, it was demonstrated that the esterase substrate p-nitrophenylbutyrate is hydrolyzed by phenmedipham hydrolase.