Cunninghamella elegans oxidized naphthalene to ethyl acetate-soluble and water-soluble metabolites. Experiments with [14C]-naphthalene indicated that 21% of the substrate was converted into metabolites. The ratio of organic-soluble metabolites to water-soluble metabolites was 76:24. The major ethyl acetate-soluble naphthalene metabolites were trans-1,2-dihydroxy-1,2-dihydro-naphthalene, 4-hydroxy-1-tetralone, and 1-naphthol. Enzymatic treatment of the aqueous phase with either arylsulfatase or beta-glucuronidase released metabolites of naphthalene that were extractable with ethyl acetate. In both cases, the major metabolite was 1-naphthol. The ratio of water-soluble sulfate conjugates to water-soluble glucuronide conjugates was 1:1. Direct analysis of the aqueous phase by high-pressure liquid and thin-layer chromatographic and mass spectrometric techniques indicated that 1-naphthyl sulfate and 1-naphthyl glucuronic acid were major water-soluble metabolites formed from the fungal metabolism of naphthalene. C. elegans oxidized biphenyl primarily to 4-hydroxy biphenyl. Deconjugation experiments with biphenyl water-soluble metabolites indicated that the glucuronide and sulfate ester of 4-hydroxy biphenyl were metabolites. The data demonstrate that sulfation and glucuronidation are major pathways in the metabolism of aromatic hydrocarbons by fungi.