2-chloro-4-nitroaniline (2-C-4-NA) is used as an intermediate in the manufacture of dyes, pharmaceuticals, corrosion inhibitor and also used in the synthesis of niclosamide, a molluscicide. It is marked as a black-listed substance due to its poor biodegradability. We report biodegradation of 2-C-4-NA and its pathway characterization by Rhodococcus sp. strain MB-P1 under aerobic conditions. The strain MB-P1 utilizes 2-C-4-NA as the sole carbon, nitrogen, and energy source. In the growth medium, the degradation of 2-C-4-NA occurs with the release of nitrite ions, chloride ions, and ammonia. During the resting cell studies, the 2-C-4-NA-induced cells of strain MB-P1 transformed 2-C-4-NA stoichiometrically to 4-amino-3-chlorophenol (4-A-3-CP), which subsequently gets transformed to 6-chlorohydroxyquinol (6-CHQ) metabolite. Enzyme assays by cell-free lysates prepared from 2-C-4-NA-induced MB-P1 cells, demonstrated that the first enzyme in the 2-C-4-NA degradation pathway is a flavin-dependent monooxygenase that catalyzes the stoichiometric removal of nitro group and production of 4-A-3-CP. Oxygen uptake studies on 4-A-3-CP and related anilines by 2-C-4-NA-induced MB-P1 cells demonstrated the involvement of aniline dioxygenase in the second step of 2-C-4-NA degradation. This is the first report showing 2-C-4-NA degradation and elucidation of corresponding metabolic pathway by an aerobic bacterium.