Abstract: A DNA fragment containing a caffeine demethylase gene produced by a microorganism belonging to the genus Pseudomonas and capable of assimilating caffeine and a process for producing a 3-methyl-7-alkylxanthine comprising cultivating a novel bacterium strain of the genus Pseudomonas having been transformed with a recombinant DNA having integrated therein the above-mentioned DNA fragment in a nutrient culture medium containing a 1,3-dimethyl-7-alkylxanthine to produce a 3-methyl-7-alkylxanthine in the culture and recovering the produced 3-methyl-7-alkylxanthine from the culture are disclosed, as well as a process for producing 3-methyl-7-propylxanthine, comprising cultivating a microorganism capable of converting 1,3-dimethyl-7-propylxanthine to 3-methyl-7-propylxanthine or a mutant thereof in a nutrient culture medium containing 1,3-dimethyl-7-propylxanthine, to produce 3-methyl-7-propylxanthine in the culture and recovering the produced 3-methyl-7-propylxanthine from the culture.