An enzyme capable of dehalogenating vicinal haloalcohols to their corresponding epoxides was purified from the 3-chloro-1,2-propanediol-utilizing bacterium Arthrobacter sp. strain AD2. The inducible haloalcohol dehalogenase converted 1,3-dichloro-2-propanol, 3-chloro-1,2-propanediol, 1-chloro-2-propanol, and their brominated analogs, 2-bromoethanol, as well as chloroacetone and 1,3-dichloroacetone. The enzyme possessed no activity for epichlorohydrin (3-chloro-1,2-epoxypropane) or 2,3-dichloro-1-propanol. The dehalogenase had a broad pH optimum at about 8.5 and a temperature optimum of 50 degrees C. The enzyme followed Michaelis-Menten kinetics, and the Km values for 1,3-dichloro-2-propanol and 3-chloro-1,2-propanediol were 8.5 and 48 mM, respectively. Chloroacetic acid was a competitive inhibitor, with a Ki of 0.50 mM. A subunit molecular mass of 29 kDa was determined by sodium dodecyl sulfate-polyacrylamide gel electrophoresis. With gel filtration, a molecular mass of 69 kDa was found, indicating that the native protein is a dimer. The amino acid composition and N-terminal amino acid sequence are given.