The origins and the evolutionary history of tetrahydromethanopterin-linked C1 transfer reactions that are part of two environmentally important biotransformations, methylotrophy and methanogenesis, are still not well understood. In previous studies, we have expanded the known phylogenetic diversity of these reactions by identifying genes highly diverging from the ones associated with cultivated Proteobacteria, Planctomycetes, or Archaea (M. G. Kalyuzhnaya, M. E. Lidstrom, and L. Chistoserdova, Microb. Ecol. 48:463-472, 2004; M. G. Kalyuzhnaya, O. Nercessian, M. E. Lidstrom, and L. Chistoserdova, Environ. Microbiol. 7:1269-1274, 2005). Here we used a metagenomic approach to demonstrate that these divergent genes are present with high abundance in the microbial community inhabiting Lake Washington sediment. We also gained preliminary insights into the genomic composition of the organisms possessing these genes by sequencing genomic fragments from three uncultured microbes possessing the genes of interest. Phylogenetic analyses suggested that, although distantly related to each other, these organisms deeply diverge from known Bacteria and Archaea, with more relation to the former, suggesting their affiliation with a new bacterial phylum. We also demonstrate, via specific mRNA detection, that these divergent genes are expressed in the environment, pointing toward their potential role in local carbon cycling.