Several strains of basidiom ycetes were examined for their ability to transform α-and β-pinene in agitated submerged cultures. Four major metabolites of α-pinene (verbenol, verbenone, myrtenol, and trans-pinocarveol) and three main metabolites of β-pinene (1,4-cineol, myrtenol, and trans-pinocarveol) were isolated from the fermentation broth. The metabolic pathways included allylic oxidation, oxidative cleavage and further regioselective oxidation. Ganoderma applanatum was found to carry out the stereoselective allylic hydroxylation of α-pinene to verbenol, and of β-pinene to trans-pinocarveol in trans position to the C -C bridge. The optimal conditions of the bioreaction were established with respect to substrate concentration, incubation time and conversion time. Due to growth inhibition caused by elevated substrate concentration, the bioconversion of β-pinene required pre-grown cultures. Generally, mycelial pellet cultures were supplemented with the terpene substrate when a residual glucose content of 50% was reached. Depending on strain this point was reached after about 48 h. An incubation period of two to three days gave best yields. The transient accumulation of oxygenated products apparently reflected different reaction velocities of the successive catabolic steps.