Phytoestrogens are plant-derived hormonally-active compounds known to cause varied reproductive, immunosuppressive and behavioral effects in vertebrates. In this study, biodegradation of luteolin, a common phytoestrogen, was investigated during incubation with endophytic fungus Phomopsis liquidambari. The optimum concentration of luteolin as sole carbon source supplied in culture was 200 mg L(-1), which allowed 97 and 99 % degradation of luteolin by P. liquidambari in liquid culture and soil conditions, respectively. The investigation of the fungal metabolic pathway showed that luteolin was first decomposed to caffeic acid and phloroglucinol. These intermediate products were degraded to protocatechuic acid and hydroxyquinol, respectively, and then rings were opened by ring-cleavage dioxygenases. Two novel genes encoding the protocatechuate 3,4-dioxygenase and hydroxyquinol 1,2-dioxygenase were successfully cloned. Reverse-transcription quantitative polymerase chain reaction demonstrated that expression levels of mRNA of these two genes increased significantly after P. liquidambari was induced by the intermediate products caffeic acid and phloroglucinol, respectively. These results revealed that P. liquidambari can biodegrade luteolin efficiently and could potentially be used to bioremediate phytoestrogen contamination.