An unstable yet efficient phenanthrene-degrading bacterium strain Ph-3 was isolated from a petroleum-contaminated site at the Mathura Oil Refinery, India. The strain was identified as Pseudomonas sp. using a polyphasic approach. An analysis of the intermediates and assays of the degradative enzymes from a crude extract of phenanthrene-grown cells showed a novel and previously unreported pattern of 1, 2-dihydroxy naphthalene and salicylic acid production. While strain Ph-3 lost its phenanthrene- degrading potential during successive transfers on a rich medium, it maintained this trait in oligotrophic soil conditions under the stress of the pollutant and degraded phenanthrene efficiently in soil microcosms. Although the maintenance and in vitro study of unstable phenotypes are difficult and such strains are often missed during isolation, purification, and screening, these bacteria constitute a substantial fraction of the microbial community at contaminated sites and play an important role in pollutant degradation during biostimulation or monitored natural attenuation.