4-Cresol is not only a significant synthetic intermediate for production of many aromatic chemicals, but also a priority environmental pollutant because of its toxicity to higher organisms. In our previous studies, a gene cluster implicated to be involved in 4-cresol catabolism, creCDEFGHIR, was identified in Corynebacterium glutamicum and partially characterized in vivo. In this work, we report on the discovery of a novel 4-cresol biodegradation pathway that employs phosphorylated intermediates. This unique pathway initiates with the phosphorylation of the hydroxyl group of 4-cresol, which is catalyzed by a novel 4-methylbenzyl phosphate synthase, CreHI. Next, a unique class I P450 system, CreJEF, specifically recognizes phosphorylated intermediates and successively oxidizes the aromatic methyl group into carboxylic acid functionality via alcohol and aldehyde intermediates. Moreover, CreD (phosphohydrolase), CreC (alcohol dehydrogenase), and CreG (aldehyde dehydrogenase) were also found to be required for efficient oxidative transformations in this pathway. Steady-state kinetic parameters (Km and kcat) for each catabolic step were determined, and these results suggest that kinetic controls serve a key role in directing the metabolic flux to the most energy effective route.