A novel biocatalytic system for the synthesis of industrially relevant C2 chemicals (e.g., ethylene glycol (3)) from formaldehyde (1) was established. The biocatalytic system consisted of a newly discovered thermostable glyoxylate carboligase from Escherichia coli K-12 (EcGCL) and a lactaldehyde reductase (FucO) of E. coli K-12. EcGCL's affinity for formaldehyde was first improved by engineering the substrate access tunnel. One of the variants (i.e., EcGCL_{R484MN283QL478M}) showed a high substrate affinity and catalytic efficiency of 18 mM and 5.2 M⁻¹ s⁻¹, respectively, for the condensation of two molecules of formaldehyde into one molecule of glycolaldehyde. The recombinant E. coli cells expressing both EcGCL_{R484MN283QL478M} and FucO produced ethylene glycol (3) up to 6.6 mM from formaldehyde (1) with a bioconversion of 66% via glycolaldehyde (2), without leaving the reactants (1 and 2) in the reaction medium. This study demonstrated the biocatalytic synthesis of ethylene glycol from C1 compounds in an environment-friendly way.