The filamentous fungus, Cunninghamella elegans, was found to metabolize the potent carcinogen, 3-methylcholanthrene (3-MC) to 1-hydroxy-3-MC, 2-hydroxy-3-MC, 1-keto-3-MC, 2-keto-3-MC and trans-9,10-dihydrodiols of 1-hydroxy-3-MC. In addition several unidentified derivatives of 3-MC were found. The metabolites formed were separated by high pressure liquid chromatography (HPLC) and identified by comparison of retention times, absorbance, fluorescence and mass spectra with those of synthetic standards. Incubation of (+/-)-1-hydroxy-3-MC and (+/-)-2-hydroxy-3-MC with cells of C. elegans indicated that 1-hydroxy-3-MC is metabolized to form diasteromerically related trans-9,10-dihydrodiols of 1-hydroxy-3-MC. Experiments with 3-[14C]MC showed that over a 48-h period, 8.7% of the hydrocarbon was oxidized to organic solvent-soluble metabolic products. Most of the metabolites were polar products, some of which co-chromatographed with trans-9,10-dihydrodiols of 1-hydroxy-3-MC. The results show that C. elegans has the ability to oxidize 3-MC to metabolites that have been implicated as proximate carcinogenic forms of 3-MC in higher organisms.