The kinetics and specificity of O-demethylation were studied in cell-free extracts of the strictly anaerobic, methanethiol- and dimethylsulfide-producing homoacetogen Holophaga foetida strain TMBS4 with methanethiol and tetrahydrofolate (H-4 folate) as methyl accepters. Extracts of cells grown with 3,4,5-trimethoxybenzoate contained an enzyme system that demethylated various phenyl methyl ethers with at least one ol rho-positioned hydroxyl or methoxyl group (the ortho system) and also contained a decarboxylase. Extracts of cells grown with 3,5-dihydroxyanisole contained an enzyme system with a novel specificity that demethylated only the meta-hydroxylated compounds 3,5-dihydroxyanisole and 3-hydroxyanisole (the meta system) and lacked a decarboxylase. H-4 folate-dependent demethylation produced CH3H4 folate. For a photometric in vitro assay of the meta system the NADPH-consuming phloroglucinol reductase (PR) reaction was coupled to the phloroglucinol-yielding demethylation of 3,5-dihydroxyanisole. The kinetics of the indicator enzyme PR were studied. The cell extract had a high and stable specific PR activity. PR was inhibited by phloroglucinol (substrate inhibition) and the substrate analogue 3,5-dihydroxyanisole. Doubling the PR activity of the coupled enzyme assay by additions of a PR-enriched fraction had no effect, showing that the PR activity supplied by cell extract did not limit reaction rates. Demethylation activity of the meta system with either methyl acceptor increased with the square of the protein concentration. With H-4 folate, the in vivo activity could be attained. Kinetic parameters for the methyl accepters were determined.