The facultatively anaerobic betaproteobacterium Castellaniella defragrans 65Phen utilizes acyclic, monocyclic and bicyclic monoterpenes as sole carbon source under oxic as well as anoxic conditions. A biotransformation pathway of the acyclic ß-myrcene required linalool dehydratase-isomerase as initial enzyme acting on the hydrocarbon. An in-frame deletion mutant did not use myrcene, but was able to grow on monocyclic monoterpenes. The genome sequence and a comparative proteome analysis together with a random transposon mutagenesis were conducted to identify genes involved in the monocyclic monoterpene metabolism. Metabolites accumulating in cultures of transposon and in-frame deletion mutants disclosed the degradation pathway.Castellaniella defragrans 65Phen oxidizes the monocyclic monoterpene limonene at the primary methyl group forming perillyl alcohol. The genome of 3.95 Mb contained a 70 kb genome island coding for over 50 proteins involved in the monoterpene metabolism. This island showed higher homology to genes of another monoterpene-mineralizing betaproteobacterium, Thauera terpenica 58EuT, than to genomes of the family Alcaligenaceae, which harbors the genus Castellaniella. A collection of 72 transposon mutants unable to grow on limonene contained 17 inactivated genes, with 46 mutants located in the two genes ctmAB (cyclic terpene metabolism). CtmA and ctmB were annotated as FAD-dependent oxidoreductases and clustered together with ctmE, a 2Fe-2S ferredoxin gene, and ctmF, coding for a NADH:ferredoxin oxidoreductase. Transposon mutants of ctmA, B or E did not grow aerobically or anaerobically on limonene, but on perillyl alcohol. The next steps in the pathway are catalyzed by the geraniol dehydrogenase GeoA and the geranial dehydrogenase GeoB, yielding perillic acid. Two transposon mutants had inactivated genes of the monoterpene ring cleavage (mrc) pathway. 2-Methylcitrate synthase and 2-methylcitrate dehydratase were also essential for the monoterpene metabolism but not for growth on acetate.The genome of Castellaniella defragrans 65Phen is related to other genomes of Alcaligenaceae, but contains a genomic island with genes of the monoterpene metabolism. Castellaniella defragrans 65Phen degrades limonene via a limonene dehydrogenase and the oxidation of perillyl alcohol. The initial oxidation at the primary methyl group is independent of molecular oxygen.