1. The dye-linked methanol dehydrogenase from Paracoccus denitrificans grown aerobically on methanol has been purified and its properties compared with similar enzymes from other bacteria. It was shown to be specific and to have high affinity for primary alcohols and formaldehyde as substrate, ammonia was the best activator and the enzyme could be linked to reduction of phenazine methosulphate. 2. Paracoccus denitrificans could be grown anaerobically on methanol, using nitrate or nitrite as electron acceptor. The methanol dehydrogenase synthesized under these conditions could not be differentiated from the aerobically-synthesized enzyme. 3. Activities of methanol dehydrogenase, formaldehyde dehydrogenase, formate dehydrogenase, nitrate reductase and nitrite reductase were measured under aerobic and anaerobic growth conditions. 4. Difference spectra of reduced and oxidized cytochromes in membrane and supernatant fractions of methanol-grown P. denitrificans were measured. 5. From the results of the spectral and enzymatic analyses it has been suggested that anaerobic growth on methanol/nitrate is made possible by reduction of nitrate to nitrite using electrons derived from the pyridine nucleotide-linked dehydrogenations of formaldehyde and formate, the nitrite so produced then functioning as electron acceptor for methanol dehydrogenase via cytochrome c and nitrite reductase.