The technical formulation of hexachlorocyclohexane (HCH) mainly consists of the insecticidal gamma-isomer and noninsecticidal alpha-, beta-, and delta-isomers, among which beta-HCH is the most recalcitrant and has caused serious environmental problems. A gamma-HCH-utilizing bacterial strain, Sphingobium sp. MI1205, was isolated from soil which had been contaminated with HCH isomers. This strain degraded beta-HCH more rapidly than the well-characterized gamma-HCH-utilizing strain Sphingobium japonicum UT26. In MI1205, beta-HCH was converted to 2,3,5,6-tetrachlorocyclohexane-1,4-diol (TCDL) via 2,3,4,5,6-pentachlorocyclohexanol (PCHL). A haloalkane dehalogenase LinB (LinB(MI)) that is 98% identical (seven amino-acid differences among 296 amino acids) to LinB from UT26 (LinB(UT)) was identified as an enzyme responsible for the two-step conversion of beta-HCH to TCDL. This property of LinB(MI) contrasted with that of LinB(UT), which catalyzed only the first step conversion of beta-HCH to PCHL. Site-directed mutagenesis and computer modeling suggested that two of the seven different amino acid residues (V134 and H247) forming a catalytic pocket of LinB are important for the binding of PCHL in an orientation suitable for the reaction in LinB(MI). However, mutagenesis also indicated the involvement of other residues for the activity unique to LinB(MI). Sequence analysis revealed that MI1205 possesses the IS6100-flanked cluster that contains two copies of the linB (MI) gene. This cluster is identical to the one located on the exogenously isolated plasmid pLB1, suggesting that MI1205 had recruited the linB genes by a horizontal transfer event.