Brown-midrib (bm) mutants are associated with reductions in lignin concentration and alterations in lignin composition. Biomass with reduced lignin concentration is more easily digested by ruminants and is a more efficient feedstock for biofuel production. Analysis of bm genes can enhance our understanding of the biochemical pathways that lead to lignin accumulation, therefore offering the promise of designing crops with reduced lignin concentration. This information could also provide an alternative way to capture carbon in soil to reduce the atmospheric level of carbon dioxide. Here, we report the mapping, cloning and functional analysis of the bm2 gene of maize. The midrib of bm2 mutants displays a reddish-brown color, which reflects alterations in lignin concentrations and/or composition that can be detected via histochemical staining. The bm2 gene was mapped to an internal of 289-291MB on chromosome 1 using a newly developed adaptation of RNA-Seq based bulked segregant analysis (BSArSeq) that exploits the power of next generation sequencing. Based on fine mapping experiments and expression analyses a putative methylenetetrahydrofolate reductase (MTHFR) gene was identified as a bm2 candidate gene. Disturbance of this MTHFR gene via Mu insertion recreate bm2 mutants, confirming the cloning of bm2. The bm2 cDNA can complements a yeast MTHFR mutant, demonstrating that bm2 encodes a functional MTHFR protein. A model that explains the role of the MTHFR enzyme in lignin biosynthesis is presented.