A bacterial strain, QWE-5, which utilized naphthalene as its sole carbon and energy source, was isolated and identified as Streptomyces sp. It was a Gram-positive, spore-forming bacterium with a flagellum, with whole, smooth, convex and wet colonies. The optimal temperature and pH for QWE-5 were 35 °C and 7.0, respectively. The QWE-5 strain was capable of completely degrading naphthalene at a concentration as high as 100 mg/L. At initial naphthalene concentrations of 10, 20, 50, 80 and 100 mg/L, complete degradation was achieved within 32, 56, 96, 120 and 144 h, respectively. Kinetics of naphthalene degradation was described using the Andrews equation. The kinetic parameters were as follows: qmax (maximum specific degradation rate) = 1.56 h−1, Ks (half-rate constant) = 60.34 mg/L, and KI (substrate-inhibition constant) = 81.76 mg/L. Metabolic intermediates were identified by gas chromatography and mass spectrometry, allowing a new degradation pathway for naphthalene to be proposed. In this pathway, monooxygenation of naphthalene yielded naphthalen-1-ol. Further degradation by Streptomyces sp. QWE-5 produced acetophenone, followed by adipic acid, which was produced as a combination of decarboxylation and hydroxylation processes.