The steady-state cleavage of catechols by 2,3-dihydroxybiphenyl 1,2-dioxygenase (DHBD), the extradiol dioxygenase of the biphenyl biodegradation pathway, was investigated using a highly active, anaerobically purified preparation of enzyme, The kinetic data obtained using 2,3-dihydroxybiphenyl (DHB) fit a compulsory order ternary complex mechanism in which substrate inhibition occurs. The K-m for dioxygen was 1280 +/- 70 mu M, which is at least 2 orders of magnitude higher than that reported for catechol 2,3-dioxygenases, K-m and K-d for DHB were 22 +/- 2 and 8 +/- 1 mu M, respectively, DI-IBD was subject to reversible substrate inhibition and mechanism-based inactivation. In air-saturated buffer, the partition ratios of catecholic substrates substituted at C-3 were inversely related to their apparent specificity constants, Small organic molecules that stabilized DHBD most effectively also inhibited the cleavage reaction most strongly. The steady-state kinetic data and crystallographic results suggest that the stabilization and inhibition are due to specific interactions between the organic molecule and the active site of the enzyme. t-Butanol stabilized the enzyme and inhibited the cleavage of DHB in a mixed fashion, consistent with the distinct binding sites occupied by t-butanol in the crystal structures of the substrate-free form of the enzyme and the enzyme-DHB complex. In contrast, crystal structures of complexes with catechol and 3-methylcatechol revealed relationships between the binding of these smaller substrates and t-butanol that are consistent with the observed competitive inhibition.