A halotolerant Gram-negative eubacterium was isolated from soil collected at a storage site for formaldehyde near a chemical plant that uses formaldehyde in the production of glue. The strain, designated MA-C and identified as Halomonas sp. (DSM 7328), grew at salt concentrations from zero to above 20%. Halomonas sp. strain MA-C was found to be highly tolerant to formaldehyde and grew well in the presence of up to 75-100 mg/L formaldehyde. The isolate transformed formaldehyde at a high rate by means of a constitutive NAD- and glutathione-dependent formaldehyde dehydrogenase (EC 188.8.131.52). Previous exposure to formaldehyde resulted in an increase in formaldehyde dehydrogenase activity from 280-480 to 650-850 nmol · mg protein-1 · min-1. Formate did not accumulate in culture media enriched with formaldehyde, and formate added to cultures was rapidly metabolized. An inducible NAD-dependent formate dehydrogenase (EC 184.108.40.206) was detected (activity between 14 and 34 nmol NAD reduced mg protein-1 · min-1). Radioactive labelling experiments showed that neither formaldehyde nor formate was incorporated into cell material to a significant extent.