Z-phenylacetaldoxime (Z-PAOx) degrading bacterium, identified as Bacillus sp. strain OxB-1, was isolated from soil after 2 months acclimation. The enzyme involved in the degradation of Z-PAOx was induced by the aldoxime and required FMN for its activity. The enzyme was partially purified from the cell-free extract of the strain and shown to catalyze the stoichiometric dehydration reaction of Z-PAOx to form phenylacetonitrile (PAN). Activities of nitrilase and amidase acting on PAN and phenylacetamide (PAAm), respectively, to form phenylacetate (PAA) were found in the strain grown on Z-PAOx. This is the first report of aldoxime dehydratase co-existing with nitrile degrading enzymes in bacteria.