Deoxynivalenol (DON) is a natural toxin of fungi that cause Fusarium head blight disease of wheat and other small-grain cereals. DON accumulates in infected grains and promotes the spread of the infection on wheat, posing serious problems to grain production. The elucidation of DON-catabolic genes and enzymes in DON-degrading microbes will provide new approaches to decrease DON contamination. Here, we report a cytochrome P450 system capable of catabolizing DON in Sphingomonas sp. strain KSM1, a DON-utilizing bacterium newly isolated from lake water. The P450 gene ddnA was cloned through an activity-based screening of a KSM1 genomic library. The genes of its redox partner candidates (flavin adenine dinucleotide [FAD]-dependent ferredoxin reductase and mitochondrial-type [2Fe-2S] ferredoxin) were not found adjacent to ddnA; the redox partner candidates were further cloned separately based on conserved motifs. The DON-catabolic activity was reconstituted in vitro in an electron transfer chain comprising the three enzymes and NADH, with a catalytic efficiency (k(cat)/K(m)) of 6.4 mM(-1) s(-1). The reaction product was identified as 16-hydroxy-deoxynivalenol. A bioassay using wheat seedlings revealed that the hydroxylation dramatically reduced the toxicity of DON to wheat. The enzyme system showed similar catalytic efficiencies toward nivalenol and 3-acetyl deoxynivalenol, toxins that frequently cooccur with DON. These findings identify an enzyme system that catabolizes DON, leading to reduced phytotoxicity to wheat.