Intact cells of (+/-)camphor-grown Pseudomonas putida, ATCC17453(CAM), have been shown to oxidize readily the monoketone derivative of cage hydrocarbon adamantane, forming oxygenated products indicative of both biological Baeyer-Villiger and hydroxylation reactions. Formed products were identified as 4-oxahomoadamantan-5-one, 5-hydroxyadamantan-2-one and 1-hydroxy-4-oxahomoadamantan-5-one. Minor products formed as a result of secondary reactions were tentatively identified as syn- and anti-1,4-dihydroxyadamantanes and bicyclo[3.3.1]nonan-3-ol. Adamantanone initial concentrations determined whether 1-hydroxy-4-oxahomoadamantan-5-one was the sole product (below 120 mg/l) or 4-oxahomoadamantan-5-one was the principle (up to 92%) product (240-600 mg/l). Formation of 1-hydroxy-4-oxahomoadamantan-5-one appears to occur by two routes determined by the sequence of lactonization and hydroxylation.