Many plants produce allelopathic chemicals, such as stilbenes, to inhibit pathogenic fungi. The degradation of allelopathic compounds by bacteria associated with the plants would limit their effectiveness, but little is known about the extent of biodegradation or the bacteria involved. Screening of tissues and rhizosphere of peanut (Arachis hypogaea) plants revealed substantial enrichment of bacteria able to grow on resveratrol and pterostilbene, the most common stilbenes produced by the plants. Investigation of the catabolic pathway in Sphingobium sp. strain JS1018, isolated from the rhizosphere, indicated that the initial cleavage of pterostilbene was catalyzed by a carotenoid cleavage oxygenase (CCO), which led to the transient accumulation of 4-hydroxybenzaldehyde and 3,5-dimethoxybenzaldehyde. 4-Hydroxybenzaldehyde was subsequently used for the growth of the isolate, while 3,5-dimethoxybenzaldehyde was further converted to a dead-end metabolite with a molecular weight of 414 (C24H31O6). The gene that encodes the initial oxygenase was identified in the genome of strain JS1018, and its function was confirmed by heterologous expression in Escherichia coli. This study reveals the biodegradation pathway of pterostilbene by plant-associated bacteria. The prevalence of such bacteria in the rhizosphere and plant tissues suggests a potential role of bacterial interference in plant allelopathy.