2-Hydroxybiphenyl 3-monooxygenase (HbpA), the first enzyme of 2-hydroxybiphenyl degradation in Pseudomonas azelaica HBP1, was purified 26-fold with a yield of 8% from strain HBP1 grown on 2-hydroxybiphenyl. The enzyme was also purified from a recombinant of Escherichia coli JM109, which efficiently expressed the hbpA gene. Computer densitometry of scanned slab gels revealed a purity of over 99% for both enzyme preparations. Gel filtration, subunit cross-linking, and SDS-polyacrylamide gel electrophoresis showed that the enzyme was a homotetramer with a molecular mass of 256 kDa. Each subunit had a molecular mass of 60 kDa containing one molecule of noncovalently bound FAD. The monooxygenase had a pI of 6.3. It catalyzed the NADH-dependent ortho-hydroxylation of 2-hydroxybiphenyl to 2,3-dihydroxybiphenyl. Molecular oxygen was the source of the additional oxygen of the product. The enzyme hydroxylated various phenols with a hydrophobic side chain adjacent to the hydroxy group. All substrates effected partial uncoupling of NADH oxidation from hydroxylation with the concomitant formation of hydrogen peroxide. 2,3-Dihydroxybiphenyl, the product of the reaction with 2-hydroxybiphenyl, was a non-substrate effector that strongly facilitated NADH oxidation and hydrogen peroxide formation without being hydroxylated and also was an inhibitor. The apparent Km values (30 degrees C, pH 7.5) were 2.8 microM for 2-hydroxybiphenyl, 26.8 microM for NADH, and 29.2 microM for oxygen. The enzyme was inactivated by p-hydroxymercuribenzoate, a cysteine-blocking reagent. In the presence of 2-hydroxybiphenyl, the enzyme was partly protected against the inactivation, which was reversed by the addition of an excess of dithiothreitol. The NH2-terminal amino acid sequence of the enzyme contained the consensus sequence GXGXXG, indicative of the betaalphabeta-fold of the flavin binding site and shared homologies with that of phenol 2-hydroxylase from Pseudomonas strain EST1001 as well as with that of 2,4-dichlorophenol 6-hydroxylase from Ralstonia eutropha.