We identified a p-cumate degrading gene cluster (designated cmt) with a novel organization in our genomic studies of the terpene-degrading Rhodococcus sp. strain T104. The mutant strain SN140, isolated for the inability to grow on p-cumate, accumulates 2,3-dihydroxy-p-cumate as identified by liquid chromatography-mass spectrometry and 300 MHz proton nuclear magnetic resonance spectroscopy. Reverse transcriptase polymerase chain reaction experiments showed that the cmt genes are operonic and induced specifically by growth on p-cumate. This report is the first example of identifying the genes for p-cumate degradation in a gram-positive organism based on functional data.