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Rhodococcus jostii RHA1, a polychlorinated biphenyl-degrading soil bacterium whose genome has been sequenced, shows lignin degrading activity in two recently developed spectrophotometric assays. Bioinformatic analysis reveals two unannotated peroxidase genes present in the genome of R. jostii RHA1 with sequence similarity to open reading frames in other lignin-degrading microbes. They are members of the Dyp peroxidase family and were annotated as DypA and DypB, on the basis of bioinformatic analysis. Assay of gene deletion mutants using a colorimetric lignin degradation assay reveals that a ΔdypB mutant shows greatly reduced lignin degradation activity, consistent with a role in lignin breakdown. Recombinant DypB protein shows activity in the colorimetric assay and shows Michaelis-Menten kinetic behavior using Kraft lignin as a substrate. DypB is activated by Mn(2+) by 5-23-fold using a range of assay substrates, and breakdown of wheat straw lignocellulose by recombinant DypB is observed over 24-48 h in the presence of 1 mM MnCl(2). Incubation of recombinant DypB with a β-aryl ether lignin model compound shows time-dependent turnover, giving vanillin as a product, indicating that C(α)-C(β) bond cleavage has taken place. This reaction is inhibited by addition of diaphorase, consistent with a radical mechanism for C-C bond cleavage. Stopped-flow kinetic analysis of the DypB-catalyzed reaction shows reaction between the intermediate compound I (397 nm) and either Mn(II) (k(obs) = 2.35 s(-1)) or the β-aryl ether (k(obs) = 3.10 s(-1)), in the latter case also showing a transient at 417 nm, consistent with a compound II intermediate. These results indicate that DypB has a significant role in lignin degradation in R. jostii RHA1, is able to oxidize both polymeric lignin and a lignin model compound, and appears to have both Mn(II) and lignin oxidation sites. This is the first detailed characterization of a recombinant bacterial lignin peroxidase.