1. In replacement culture with a formycin-producing strain. Steptomyces sp. MA406-A-1, exogenously added formycin B was quantitatively converted to formycin and the conversion was inhibited by adding the chromophore moiety of formycin. 2. The in vitro experiments revealed that the novel enzyme(s) catalyzing the formation and formycin from asparate and formycin B, but not from formycin B monophosphate, was present in this organism. The action of the partially purified enzyme(s) was also inhibited by the chromophore moiety of formycin, whereas the moiety showed no inhibitory effect on the actions of adenylosuccinate synthetase and adenylosuccinate lyase. 3. Adenine auxotrophs lacking either adenylosuccinate synthetase or adrenylosuccinate lyase were derived from strain MA406-A-1 and these auxotrophs were found to readily convert formycin B to formycin in replacement culture. From these results, it was estimated that, under the conditions of replacement culture, formycin B would be converted to formycin in vivo by the action of novel enzyme(s) rather than by the action of enzyme system including adenylosuccinate synthetase and adenylosuccinate lyase.