A newly isolated Arthrobacter ureafaciens, strain CPR706, could degrade 4-chlorophenol via a new pathway, in which the chloro-substituent was eliminated in the first step and hydroquinone was produced as a transient intermediate. Strain CPR706 exhibited much higher substrate tolerance and degradation rate than other strains that degraded 4-chlorophenol by the hydroxylation at the second carbon position to form chlorocatechol. Strain CPR706 could also degrade other para-substituted phenols (4-nitro-, 4-bromo-, 4-iodo-, and 4-fluoro-phenol) via the hydroquinone pathway.