Catalyzes the condensation of formaldehyde with tetrahydromethanopterin (H(4)MPT) to 5,10-methylenetetrahydromethanopterin, a reaction which also proceeds spontaneously, but at a lower rate than that of the enzyme-catalyzed reaction. Is an essential enzyme for methylotrophic energy metabolism and formaldehyde detoxification of this bacterium. 5,6,7,8-tetrahydromethanopterin + formaldehyde = 5,10-methylenetetrahydromethanopterin + H2O Inhibited by the addition of an excess of H4F. The KM for H(4)MPT is higher than 60 uM. Optimum pH is 7-7.5. One-carbon metabolism; formaldehyde degradation; formate from formaldehyde (H(4)MPT route): step 1/5. Homopentamer. Cells lacking this gene are unable to grow on methanol but exhibit wild-type growth on succinate. In addition, mutant is shown to be formaldehyde sensitive. Belongs to the formaldehyde-activating enzyme family.