Pasteurella multocida Sa, a bacterial strain isolated from mangrove sediment by enrichment technique, was capable of transforming dimethyl terephthalate (DMT). Biodegradation of DMT was shown to take place as a series of sequential steps involving the hydrolysis of two ester linkages between the carboxyl groups of the terephthalate and the methyl side-chain initially to produce mono-methyl terephthalate (MMT) and then terephthalic acid (TA), respectively. However, with ethanol as the carrying solvent, there was a formation of one metabolite previously not observed. The two metabolites were characterized by high performance-liquid chromatography-electron ionization mass spectrometry as MMT and mono-ethyl terephthalate (MET), suggesting the existence of an alternative biochemical pathway in the degradation of DMT by P. multocida Sa. Since the presence of MMT and ethanol in culture inoculated with P. multocida Sa was prerequisites for the formation of MET, biologically mediated trans-esterification was proposed as a mechanism for the novel biochemical process observed.