Soluble di-iron monooxygenases (SDIMOs), especially group-5 SDIMOs (i.e., tetrahydrofuran and propane monooxygenases), are of significant interest due to their potential role in the initiation of 1,4-dioxane (dioxane) degradation. Functional gene array (i.e., GeoChip) analysis of Arctic groundwater exposed to dioxane since 1980s revealed that various dioxane-degrading SDIMO genes were widespread, and PCR-DGGE analysis showed that group-5 SDIMOs were present in every tested sample, including background groundwater with no known dioxane exposure history. A group-5 thmA-like gene was enriched (2.4-fold over background, p < 0.05) in source-zone samples with higher dioxane concentrations, suggesting selective pressure by dioxane. Microcosm assays with (14)C-labeled dioxane showed that the highest mineralization capacity (6.4 ± 0.1% (14)CO2 recovery during 15 days, representing over 60% of the amount degraded) corresponded to the source area, which was presumably more acclimated and contained a higher abundance of SDIMO genes. Dioxane mineralization ceased after 7 days and was resumed by adding acetate (0.24 mM) as an auxiliary substrate to replenish NADH, a key coenzyme for the functioning of monoxygenases. Acetylene inactivation tests further corroborated the vital role of monooxygenases in dioxane degradation. This is the first report of the prevalence of oxygenase genes that are likely involved in dioxane degradation and suggests their usefulness as biomarkers of dioxane natural attenuation.