The ability of some microbial species to oxidize monomethylamine via glutamate-mediated pathways was proposed in the 1960s; however, genetic determinants of the pathways have never been described. In the present study we describe a gene cluster essential for operation of the N-methylglutamate pathway in the methylotrophic beta-proteobacterium Methyloversatilis universalis FAM5. Four major polypeptides from protein fractions displaying high activities of N-methylglutamate synthetase, N-methylglutamate dehydrogenase and γ-glutamylmethylamide synthetase were selected for mass spectrometry-based identification. The activities of enzymes were associated with the presence of peptides identified as ferredoxin-dependent glutamate synthase (GltB2), large subunit of putative heterotetrameric sarcosine oxidase (SoxA) and glutamine synthetase type III (GSIII) respectively. A gene cluster (8.3 kb) harbouring gltB2, soxA and gsIII-like genes was amplified from M. universalis FAM5, sequenced and assembled. Two partial and six complete open reading frames arranged in the order soxBDAG-gsIII-gltB132 were identified and subjected to mutational analysis, functional and metabolic profiling. We demonstrated that gltB-like and sox-like genes play a key role in methylamine utilization and encode N-methylglutamate synthetase and N-methylglutamate dehydrogenase respectively. Metabolic, enzymatic and mutational analyses showed that the gsIII-like gene encodes γ-glutamylmethylamide synthetase; however, this enzyme is not essential for oxidation of methylamine.