Penicillium adametzi and seven other species convert nalidixic acid, 1,4-dihydro-1-ethyl-7-methyl-4-oxo-1,8-naphthyridine-3-carboxylic acid, to 1,4-dihydro-1-ethyl-7-hydroxymethyl-4-oxo-1,8-naphthyridine-3-carboxylic acid. Forty-seven other species from six orders of fungi seem to achieve the same conversion as judged by chromatographic and spectral evidence. Under special conditions, P. adametzi also produces a second metabolite which was identified as the corresponding 7-carboxylic acid. The metabolic attack on the ring substituent is identical with the pathway previously established with humans. No evidence was obtained for metabolic attack on the naphthyridine nucleus itself.