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Short-chain alkanes (SCA; C2-C4) emitted from geological sources contribute to photochemical pollution and ozone production in the atmosphere. Microorganisms that oxidize SCA and thereby mitigate their release from geothermal environments have rarely been studied. In this study, propane-oxidizing cultures could not be grown from acidic geothermal samples by enrichment on propane alone, but instead required methane addition, indicating that propane was co-oxidized by methanotrophs. “Methylacidiphilum” isolates from these enrichments did not grow on propane as a sole energy source but unexpectedly did grow on C3 compounds such as 2-propanol, acetone, and acetol. A gene cluster encoding the pathway of 2-propanol oxidation to pyruvate via acetol was upregulated during growth on 2-propanol. Surprisingly, this cluster included one of three genomic operons (pmoCAB3) encoding particulate methane monooxygenase (PMO), and several physiological tests indicated that the encoded PMO3 enzyme mediates the oxidation of acetone to acetol. Acetone-grown resting cells oxidized acetone and butanone but not methane or propane, implicating a strict substrate specificity of PMO3 to ketones instead of alkanes. Another PMO-encoding operon, pmoCAB2, was induced only in methane-grown cells, and the encoded PMO2 could be responsible for co-metabolic oxidation of propane to 2-propanol. In nature, propane probably serves primarily as a supplemental growth substrate for these bacteria when growing on methane.