Background Lignin materials are abundant and among the most important potential sources for biofuel production. Development of an efficient lignin degradation process has considerable potential for the production of a variety of chemicals, including bioethanol. However, lignin degradation using current methods is inefficient. Given their immense environmental adaptability and biochemical versatility, bacterial could be used as a valuable tool for the rapid degradation of lignin. Kraft lignin (KL) is a polymer by-product of the pulp and paper industry resulting from alkaline sulfide treatment of lignocellulose, and it has been widely used for lignin-related studies. Results Beta-proteobacterium Cupriavidus basilensis B-8 isolated from erosive bamboo slips displayed substantial KL degradation capability. With initial concentrations of 0.5–6 g L-1, at least 31.3% KL could be degraded in 7 days. The maximum degradation rate was 44.4% at the initial concentration of 2 g L-1. The optimum pH and temperature for KL degradation were 7.0 and 30°C, respectively. Manganese peroxidase (MnP) and laccase (Lac) demonstrated their greatest level of activity, 1685.3 U L-1 and 815.6 U L-1, at the third and fourth days, respectively. Many small molecule intermediates were formed during the process of KL degradation, as determined using GC-MS analysis. In order to perform metabolic reconstruction of lignin degradation in this bacterium, a draft genome sequence for C. basilensis B-8 was generated. Genomic analysis focused on the catabolic potential of this bacterium against several lignin-derived compounds. These analyses together with sequence comparisons predicted the existence of three major metabolic pathways: β-ketoadipate, phenol degradation, and gentisate pathways. Conclusion These results confirmed the capability of C. basilensis B-8 to promote KL degradation. Whole genomic sequencing and systematic analysis of the C. basilensis B-8 genome identified degradation steps and intermediates from this bacterial-mediated KL degradation method. Our findings provide a theoretical basis for research into the mechanisms of lignin degradation as well as a practical basis for biofuel production using lignin materials.