Rhodococcus rhodochrous PY11 (DSM 101666) is able to use 2-hydroxypyridine as a sole source of carbon and energy. By investigating a gene cluster (hpo) from this bacterium, we were able to reconstruct the catabolic pathway of 2-hydroxypyridine degradation. Here, we report that in Rhodococcus rhodochrous PY11, the initial hydroxylation of 2-hydroxypyridine is catalyzed by a four-component dioxygenase (HpoBCDF). A product of the dioxygenase reaction (3,6-dihydroxy-1,2,3,6-tetrahydropyridin-2one) is further oxidized by HpoE to 2,3,6-trihydroxypyridine, which spontaneously forms a blue pigment. In addition, we show that the subsequent 2,3,6-trihydroxypyridine ring opening is catalyzed by the hypothetical cyclase HpoH. The final products of 2-hydroxypyridine degradation in Rhodococcus rhodochrous PY11 are ammonium ion and alpha-ketoglutarate.