A 2-haloacid dehalogenase-producing bacterium, designated DEH99, was isolated from the marine sponge Hymeniacidon perlevis using a modified enrichment medium and a pH indicator method. DEH99 could degrade only half of the racemic mixture 2-chloropropionic acid (2-CPA) in the medium. The dehalogenase of DEH99 was further determined to be a (S)-2-haloacid dehalogenase, which can degrade 2-CPA, 2-bromopropionic acid (2-BPA), and iodoacetic acid. The gene encoding the (S)-2-haloacid dehalogenase was partially sequenced and classified into the Group II family. The 2-haloacid dehalogenase showed the highest sequence similarity (77% with 21% query coverage) to the haloacid dehalogenase (dhlB) gene of Xanthobacter autotrophicus. A phylogenetic analysis of the 16S rDNA sequence demonstrated that the isolate DEH99 is a member of the genus Paracoccus. To our knowledge, this is the first report detailing the isolation of a strain of genus Paracoccus having 2-haloacid dehalogenase activity from marine sponges.