Oxidizes toluene and xylenes to (methyl)benzyl alcohols. The enzyme has a broad specificity and also oxidizes (methyl)benzyl alcohols to (methyl)benzaldehydes and indole to indoxyl. H(+) + NAD(+) + 2 reduced [2Fe-2S]-[ferredoxin] = NADH + 2 oxidized [2Fe-2S]-[ferredoxin] Binds 1 [2Fe-2S] cluster per subunit. Composed of two subunits: XylA and XylM. Belongs to the bacterial ring-hydroxylating dioxygenase ferredoxin reductase family.