A bacterial isolate, strain PDa-1, grew well on basal medium supplemented with 2-phenylenediamine, sucrose, and ammonium nitrate and completely transformed 2-phenylenediamine. The isolate was identified as Bacillus cereus. The product formed from 2-phenylenediamine was identified by EI-MS and NMR as 2-aminoacetanilide; whole cells converted 2-phenylenediamine to the product with a 76% molar yield. Whole cells also showed a broad substrate specificity toward 20 of 26 tested arylamines with substituent groups of various size and positions. Especially 2-aminobenzoic acid, 4-aminosalicylic acid, 5-aminosalicylic acid, and 2-aminofluorene were converted completely to the corresponding product with an aminoacetyl group. Cell extracts of strain PDa-1 had a high arylamine N-acetyltransferase activity. The partially purified enzyme converted 2-phenylenediamine to 2-aminoacetanilide. Strain PDa-1 constitutively expressed the enzyme in the absence of 2-phenylenediamine. Effects of 2-phenylenediamine and 2-aminoacetanilide on growth indicated that this enzyme probably plays a role in the detoxification of toxic arylamines in this strain.