The application of Penicillium notation genus for biotransformations of steroids has been investigated. The reactions observed include insertion of an oxygen atom into D-ring of steroids, 15 alpha-hydroxylation of 17 alpha-methyl testosterone derivatives, ester bond hydrolysis, and degradation of a testosterone derivatives side chain.Microbial production of testolactones, the biologically active compounds. was also achieved using this strain in up to 98% yield. (c) 2005 Elsevier Inc. All rights reserved.