A new genus, Methylarcula, with two new species, Methylarcula marina and Methylarcula terricola, are proposed for strains h1T and h37T of moderately halophilic facultatively methylotrophic bacteria isolated from the coastal saline habitats. These methylobacteria are aerobic, Gram-negative, asporogenous, non-motile, colourless rods that multiply by binary fission. Their cellular fatty acids profiles consist primarily of straight-chain unsaturated (C18:1; 70-80%), saturated (C18:0; 14-16%) and cyclopropane (C19:0; 5-6%) acids. The major ubiquinone is Q-10. The dominant phospholipids are phosphatidylethanolamine and phosphatidylcholine. Both strains could use methylamine, some sugars and organic acids as carbon and energy sources. They grew well under optimal conditions (29-35 degrees C, pH 7.5-8.5, 0.5-1.0 M NaCl) and accumulated intracellularly poly-beta-hydroxybutyrate and the compatible solute ectoine. The ectoine pool was found to increase upon increasing the external NaCl concentration and accounted for 18% of the dry cellular weight. Both strains oxidized methylamine by the N-methylglutamate (N-MG) pathway enzymes (gamma-glutamylmethylamide synthetase/lyase and N-MG synthetase/lyase) to formaldehyde and assimilated it via the icl- serine pathway. The DNA G+C content was 60-4 mol% for Methylarcula marina h1T and 57.1 mol% for Methylarcula terricola h37T. The DNA-DNA hybridization value between strains hl and h37 was 25-30%, although they had a low level of DNA relatedness (5-7%) with the type strains of the serine pathway methylobacteria belonging to the genera Methylobacterium, Aminobacter, Methylorhabdus and Methylopila. A comparative 16S rDNA sequence-based phylogenetic analysis placed the two species of Methylarcula into a separate branch of the alpha-3 subclass of the Proteobacteria. The type strains of the new species are Methylarcula marina h1T (= VKM B-2159T) and Methylarcula terricola h37T (= VKM B-2160T).