1. A cell-free system from Pseudononaw fluorescens catalysed the oxidative demethylation and subsequent ring-cleavage of vanillate, with uptake of 2-5 moles of oxygen/mole of substrate. 2. Demethylation involved absorption of 0-5mole of oxygen/mole, and required reduced glutathione (GSH) and nucleotide (probably NADPH) as cofactors, with further possible requirements, the natures of which are discussed. 3. Incomplete evidence suggested that the aromatic ring was opened via protocatechuate and the appropriate oxygenase, with absorption of 1mole of oxygen/mole of substrate, eventually yielding ,-oxoadipate. 4. The methyl group was removed sequentially as formaldehyde, formate and carbon dioxide, the steps catalysed respectively by formaldehyde dehydrogenase, which required GSH and NAD+, and formate dehydrogenase. Each enzyme was cytochrome-linked and accounted for absorption of 0-5 mole of oxygen/mole of substrate. 5. All enzymes except formate dehydrogenase, which was a cell-wall enzyme, resided in the soluble fraction of the extract. The demethylase could not be resolved because of unknown cofactor requirements.The interpretation of the results of bacterial attack on lignin is difficult because of the chemical complexity of this material. To obtain essential background information for this difficult problem we have examined the bacterial degradation of substances that could be products of lignin catabolism or that, by dehydrogenation and condensation reactions, could be converted into lignin in plants.We now present, for the first time, observations on demethylation processes by partly resolved bacterial enzymes. Whereas Axelrod (1956) and Brodie et al. (1955) demonstrated salient features of the enzymic demethylation of methoxyphenyl derivatives in mammalian tissues, no detailed information has been reported on the process in micro-organisms; although, for example, Henderson (1957Henderson ( , 1961 showed that demethylated products arise from the attack by fungal cells on methoxybenzoic acids.