Microbial arsenic (As) methylation is an important process of As biogeochemistry. Only a few As-methylating microorganisms have been isolated from paddy soil, hindering the mechanistic understanding of the process involved. We isolated 54 anaerobic and 32 aerobic bacteria from paddy soil with a high As methylation potential. Among the 86 isolates, 14 anaerobes, including 7 sulfate-reducing bacteria (SRB), but none of the aerobes were able to methylate arsenite [As(III)] or monomethylarsenite [MMA(III)] or both, suggesting that the As-methylating ability is much more prevalent in anaerobes than in aerobes. We performed a detailed investigation on As methylation by a SRB isolate, Solidesulfovibrio sp. TC1, and identified a novel bifunctional enzyme consisting of a fusion of As(III) S-adenosylmethionine (SAM) methyltransferase (ArsM) and a radical SAM protein. The enzyme (ArsSM) can catalyze As(III) methylation to MMA and DMA and subsequent adenosylation of DMA to form 5'-deoxy-5'-dimethylarsinoyl-adenosine (DDMAA), which is a key intermediate in the biosynthesis of arsenosugars. High concentrations of sulfide produced by SRB did not affect As(III) methylation to MMA but inhibited MMA methylation to DMA. Genes encoding ArsSM fusion proteins are widespread in anaerobes, particularly SRB, suggesting that ArsSM-carrying anaerobes may play an important role in As methylation in an anoxic environment.