The soil fungus Cladophialophora sp. strain T1 (= ATCC MYA-2335) was capable of growth on a model water-soluble fraction of gasoline that contained all six BTEX components (benzene, toluene, ethylbenzene, and the xylene isomers). Benzene was not metabolized, but the alkylated benzenes (toluene, ethylbenzene, and xylenes) were degraded by a combination of assimilation and cometabolism. Toluene and ethylbenzene were used as sources of carbon and energy, whereas the xylenes were cometabolized to different extents. o-Xylene and m-xylene were converted to phthalates as end metabolites; p-xylene was not degraded in complex BTEX mixtures but, in combination with toluene, appeared to be mineralized. The metabolic profiles and the inhibitory nature of the substrate interactions indicated that toluene, ethylbenzene, and xylene were degraded at the side chain by the same monooxygenase enzyme. Our findings suggest that soil fungi could contribute significantly to bioremediation of BTEX pollution.