Several lines of evidence indicate that the first step in the anaerobic metabolism of phenol is phenol carboxylation to 4-hydroxybenzoate; this reaction is considered a biological Kolbe-Schmitt carboxylation. A phenol carboxylase system was characterized by using a denitrifying Pseudomonas strain, K 172, which catalyzes an isotope exchange between 14CO2 and the carboxyl group of 4-hydroxybenzoate. The enzymatic isotope exchange activity (100 nmol min-1 mg-1 of protein) requires Mn2+ and K+. We show that this system also catalyzes the carboxylation of phenylphosphate (the phosphoric acid monophenyl ester) to 4-hydroxybenzoate and phosphate. The specific activity of phenylphosphate carboxylation at the optimal pH of 6.5 is 12 nmol of CO2 fixed min-1 mg-1 of protein. Phenylphosphate cannot be replaced by Mg(2+)-ATP and phenol. The carboxylase activity requires Mn2+ but, in contrast to the isotope exchange activity, does not require K+. The apparent Km values are 1.5 mM dissolved CO2 and 0.2 mM phenylphosphate. Several convenient assays for phenylophosphate carboxylation are described. The isotope exchange reaction and the net carboxylation reaction are catalyzed by the same oxygen-sensitive enzyme, which has a half-life in an air-saturated solution of less than 1 min. Both activities cochromatographed with a protein with a Mr of 280,000, and both activities were induced only after anaerobic growth on phenol. The carboxylation of phenylphosphate suggests that phenylphosphate itself is the physiological CO2 acceptor molecular of this novel CO2 fixation reaction. Alternatively, phenylphosphate could simulate the unknown natural precursor. It is suggested that the formation of an enzyme-bound phenolate anion from the activated phenolic compound is the rate-determining step in the carboxylation reaction.