ABSTRACT: The molecular basis for the ability of bacteria to live on caffeine as a sole carbon and nitrogen source is unknown. Pseudomonas putida CBB5, which grows on several purine alkaloids, metabolizes caffeine and related methylxanthines via sequential N-demethylation to xanthine. Metabolism of caffeine by CBB5 was previously attributed to one broad-specificity methylxanthine N-demethylase composed of two subunits, NdmA and NdmB. Here, we report that NdmA and NdmB are actually two independent Rieske nonheme iron monooxygenases with N(1)- and N(3)-specific N-demethylation activity, respectively. Activity for both enzymes is dependent on electron transfer from NADH via a redox-center-dense Rieske reductase, NdmD. NdmD itself is a novel protein with one Rieske [2Fe-2S] cluster, one plant-type [2Fe-2S] cluster, and one flavin mononucleotide (FMN) per enzyme. All ndm genes are located in a 13.2-kb genomic DNA fragment which also contained a formaldehyde dehydrogenase. ndmA, ndmB, and ndmD were cloned as His(6) fusion genes, expressed in Escherichia coli, and purified using a Ni-NTA column. NdmA-His(6) plus His(6)-NdmD catalyzed N(1)-demethylation of caffeine, theophylline, paraxanthine, and 1-methylxanthine to theobromine, 3-methylxanthine, 7-methylxanthine, and xanthine, respectively. NdmB-His(6) plus His(6)-NdmD catalyzed N(3)-demethylation of theobromine, 3-methylxanthine, caffeine, and theophylline to 7-methylxanthine, xanthine, paraxanthine, and 1-methylxanthine, respectively. One formaldehyde was produced from each methyl group removed. Activity of an N(7)-specific N-demethylase, NdmC, has been confirmed biochemically. This is the first report of bacterial N-demethylase genes that enable bacteria to live on caffeine. These genes represent a new class of Rieske oxygenases and have the potential to produce biofuels, animal feed, and pharmaceuticals from coffee and tea waste.