Rhodococcus jostii RHA1 peroxidase DypB has been recently identified as a bacterial lignin peroxidase. The dypB gene is cotranscribed with a gene encoding an encapsulin protein, which has been shown in Thermotoga maritima to assemble to form a 60-subunit nanocompartment, and DypB contains a C-terminal sequence motif that is thought to target the protein to the encapsulin nanocompartment. R. jostii RHA1 encapsulin protein was overexpressed in R. jostii RHA1, and purified as a high-Mr assembly (Mr > 106). The purified nanocompartment could be disassembled to form a low-Mr species by treatment at pH 3.0, and reassembled to form an assembly of similar size and shape, as assessed by dynamic light scattering. Recombinant DypB could be assembled in vitro with monomeric encapsulin to form an assembly of similar size to the encapsulin-only nanocompartment, as assessed by gel filtration. The assembled complex showed enhanced lignin degradation activity per milligram of DypB present as compared with native DypB, as determined with a nitrated lignin UV–visible assay method. The measured stoichiometry of 8.6 μmol encapsulin/μmol DypB in the complex was similar to the value of 10 predicted from the crystal structure.