Ginsenosides are the most important ingredient of ginseng and are known to possess many pharmacological and biological effects. Rb1, a major protopanaxadiol ginsenoside, is the most abundant ginsenoside in Panax ginseng C.A Meyer and can be hydrolyzed into more pharmaceutically potent minor ginsenosides. To identify a microorganism that is capable of converting Rb1 into other ginsenosides, we screened 12 Microbacterium spp., and M. trichothecenolyticum was identified as a likely candidate. M. trichothecenolyticum converted Rb1 into Rd and then into Rh2 based on TLC and HPLC analyses of reaction products. This biotransformation method can be easily applied for mass production of Rd and Rh2 by using Rb1.