Bacterial catabolic pathways have considerable potential as industrial biocatalysts for the valorization of lignin, a major component of plant-derived biomass. Here, we describe a pathway responsible for the catabolism of acetovanillone, a major component of several industrial lignin streams. Rhodococcus rhodochrous GD02 was previously isolated for growth on acetovanillone. A high-quality genome sequence of GD02 was generated. Transcriptomic analyses revealed a cluster of eight genes up-regulated during growth on acetovanillone and 4-hydroxyacetophenone, as well as a two-gene cluster up-regulated during growth on acetophenone. Bioinformatic analyses predicted that the hydroxyphenylethanone (Hpe) pathway proceeds via phosphorylation and carboxylation, before β-elimination yields vanillate from acetovanillone or 4-hydroxybenzoate from 4-hydroxyacetophenone. Consistent with this prediction, the kinase, HpeHI, phosphorylated acetovanillone and 4-hydroxyacetophenone. Furthermore, HpeCBA, a biotin-dependent enzyme, catalyzed the ATP-dependent carboxylation of 4-phospho-acetovanillone but not acetovanillone. The carboxylase’s specificity for 4-phospho-acetophenone (kcat/KM = 34 ± 2 mM−1 s−1) was approximately an order of magnitude higher than for 4-phospho-acetovanillone. HpeD catalyzed the efficient dephosphorylation of the carboxylated products. GD02 grew on a preparation of pine lignin produced by oxidative catalytic fractionation, depleting all of the acetovanillone, vanillin, and vanillate. Genomic and metagenomic searches indicated that the Hpe pathway occurs in a relatively small number of bacteria. This study facilitates the design of bacterial strains for biocatalytic applications by identifying a pathway for the degradation of acetovanillone.