Xanthan gum, a natural heteropolysaccharide produced by Xanthomonas species, has many biotechnological applications across industries due to its unique rheological properties. Expanding its utility requires specific enzymes capable of targeted xanthan modification or degradation. In this study, a novel bacterial strain, isolated from a spoiled xanthan sample and identified as Paenibacillus taichungensis I5, was shown to degrade xanthan using a plate screening assay with Congo red. Enzyme activity tests of the culture supernatant demonstrated the secretion of xanthan-degrading enzymes. Genome and proteome analyses suggests a chromosomal xanthan utilization locus encoding a suite of enzymes, including a xanthanase (Pt_XanGH9), two xanthan lyases (Pt_XanPL8a and Pt_XanPL8b), two unsaturated glucuronidases, two α-mannosidases, as well as transport and regulator proteins. Functional characterization through recombinant protein expression and enzyme assays confirmed the functions of Pt_XanGH9, Pt_XanPL8a and Pt_XanPL8b on native xanthan and xanthan-derived oligosaccharides. The polysaccharide degradation products released by these enzymes were identified via LC-MS analysis. The two xanthan lyases differed in cleavage specificity. In contrast to Pt_XanPL8a, Pt_XanPL8b is synthesized with an N-terminal signal peptide, yet both lyases were detected in cell-free supernatant during growth on xanthan. Based on the composition of the xanthan utilization gene cluster and preliminary enzyme characteristics, a working model for xanthan utilization by P. taichungensis I5 is proposed. Reaching a better understanding of bacterial xanthan derivatives and xanthan degrading pathways and the enzymes involved may help to develop modified xanthan derivatives and xanthan degrading enzymes that align with the specific demands of various industrial process.