Under ligninolytic conditions, the white rot basidiomycete Phanerochaete chrysosporium mineralizes 2,4-dinitrotoluene (I). The pathway for the degradation of I was elucidated by the characterization of fungal metabolites and oxidation products generated by lignin peroxidase (LiP), manganese peroxidase (MnP), and crude intracellular cell extracts. The multistep pathway involves the initial reduction of I to yield 2-amino-4-nitrotoluene (II). II is oxidized by MnP to yield 4-nitro-1,2-benzoquinone (XII) and methanol. XII is then reduced to 4-nitro-1,2-hydroquinone (V), and the latter is methylated to 1,2-dimethoxy-4-nitrobenzene (X). 4-Nitro-1,2-hydroquinone (V) is also oxidized by MnP to yield nitrite and 2-hydroxybenzoquinone, which is reduced to form 1,2,4-trihydroxybenzene (VII). 1,2-Dimethoxy-4-nitrobenzene (X) is oxidized by LiP to yield nitrite, methanol, and 2-methoxy-1,4-benzoquinone (VI), which is reduced to form 2-methoxy-1,4-hydroquinone (IX). The latter is oxidized by LiP and MnP to 4-hydroxy-1,2-benzoquinone, which is reduced to 1,2,4-trihydroxybenzene (VII). The key intermediate 1,2,4-trihydroxybenzene is ring cleaved by intracellular cell extracts to produce, after reduction, beta-ketoadipic acid. In this pathway, initial reduction of a nitroaromatic group generates the peroxidase substrate II. Oxidation of II releases methanol and generates 4-nitro-1,2-benzoquinone (XII), which is recycled by reduction and methylation reactions to regenerate intermediates which are in turn substrates for peroxidase-catalyzed oxidation leading to removal of the second nitro group. Thus, this unique pathway apparently results in the removal of both aromatic nitro groups before ring cleavage takes place.