The oxalate-carbonate pathway (OCP) involves degradation of soil oxalate to carbonate. To exploit and manage this natural mineralization of assimilated atmospheric CO2 into stable carbonates, improved understanding of this complex biotransformation process is needed. A strain of oxalate-degrading bacteria, Azospirillum sp. OX-1, was isolated from soil, and its secondary products of calcium oxalate degradation were analyzed and characterized using SEM, XRD, TG/DTG-DTA and FTIR-spectroscopy. The molecular mechanism of calcium oxalate degradation was also analyzed using proteomics. The results showed, for the first time, that OX-1 could not only degrade calcium oxalate to calcium carbonate, but also that the process was accompanied by synthesis of methane. Proteomic analysis demonstrated that OX-1 has a dual enzyme system for calcium oxalate degradation, using formyl-CoA transferase (FRC) and thiamine pyrophosphate(ThDP)-dependent oxalyl-CoA decarboxylase (OXC) to form calcium carbonate. Up-regulated expression of enzymes related to methane synthesis was also detected during calcium oxalate degradation. Since methane is also a potent greenhouse gas, these new results suggest that the utility of exploiting the OCP to reduce atmospheric CO2 must be re-evaluated and that further studies should be conducted to reveal how widespread the methane producing capacity of strain OX-1 is in other bacteria and soil environments.