The metabolism of cholic acid by Arthrobacter simplex was investigated. This organism effected both ring a cleavage and elimination of the hydroxyl groups at C-7 and C-12 and gave a new metabolite, (4R)-4-[4alpha-(2-carboxyethyl)-3aalpha-hexahydro-7abeta-methyl-5-oxoindan-1beta-yl]valeric acid, which was isolated and identified through its partial synthesis. A degradative pathway of cholic acid into this metabolite is tentatively proposed, and the possibility that the proposed pathway could be extended to the cholic acid degradation by other microorganisms besides A. simplex is discussed. The possibility that the observed reactions in vitro could occur during the metabolism of bile acids in vivo is considered.