The fate of fuel oxygenates such as methyl tert-butyl ether (MTBE) in the subsurface is governed by their degradability under various redox conditions. The key intermediate in degradation of MTBE and ethyl tert-butyl ether (ETBE) is tert-butyl alcohol (TBA) which was often found as accumulating intermediate or dead-end product in lab studies using microcosms or isolated cell suspensions. This review discusses in detail the thermodynamics of the degradation processes utilizing various terminal electron acceptors, and the aerobic degradation pathways of MTBE and TBA. It summarizes the present knowledge on MTBE and TBA degradation gained from either microcosm or pure culture studies and emphasizes the potential of compound-specific isotope analysis (CSIA) for identification and quantification of degradation processes of slowly biodegradable pollutants such as MTBE and TBA. Microcosm studies demonstrated that MTBE and TBA may be biodegradable under oxic and nearly all anoxic conditions, although results of various studies are often contradictory, which suggests that site-specific conditions are important parameters. So far, TBA degradation has not been shown under methanogenic conditions and it is currently widely accepted that TBA is a recalcitrant dead-end product of MTBE under these conditions. Reliable in situ degradation rates for MTBE and TBA under various geochemical conditions are not yet available. Furthermore, degradation pathways under anoxic conditions have not yet been elucidated. All pure cultures capable of MTBE or TBA degradation isolated so far use oxygen as terminal electron acceptor. In general, compared with hydrocarbons present in gasoline, fuel oxygenates biodegrade much slower, if at all. The presence of MTBE and related compounds in groundwater therefore frequently limits the use of in situ biodegradation as remediation option at gasoline-contaminated sites. Though degradation of MTBE and TBA in field studies has been reported under oxic conditions, there is hardly any evidence of substantial degradation in the absence of oxygen. The increasing availability of field data from CSIA will foster our understanding and may even allow the quantification of degradation of these recalcitrant compounds. Such information will help to elucidate the crucial factors of site-specific biogeochemical conditions that govern the capability of intrinsic oxygenate degradation.