1. Zearalenone, a fungal oestrogenic compound, was subjected to microbial transformation studies. Preliminary screening with 150 fungal species showed that Gliocladium roseum was capable of metabolizing zearalenone in 80-90% yields. 2. Large-scale fermentation with G. roseum produced a 1:1 mixture of 1-(3,5-dihydroxyphenyl)-10'hydroxy-1-undecen-6'one and 1-(3,5-dihydroxyphenyl)-6'hydroxy-1-undecen-10'one. The compounds were isolated and purified at -20°C. and identified using spectroscopic analysis and by comparison to products obtained from alkaline hydrolysis of zearalenone.