A cell extract of a polychlorophenol-degrading bacterium, Rhodococcus sp. strain CP-2, isolated from chlorophenol-contaminated soil, was shown to dechlorinate tetrachlorohydroquinone, the first intermediate in pentachlorophenol and 2,3,5,6-tetrachlorophenol degradation. Degradation of tetrachlorohydroquinone was catalyzed by a soluble enzyme(s). The reaction sequence for complete dechlorination involved hydroxylation and three reductive dechlorinations, producing 1,2,4-trihydroxybenzene. All chlorines were thus removed from the polychlorinated compound before ring cleavage.