A mutant strain of Mycobacterium sp. M12 was obtained. It can convert cholesterol. 3 beta-acetyl-cholesterol, sitosterol and 3 beta-acetyl-sitosterol to 4-androstane-3,17-dione (4-AD) (main product, the yield is 69%, 70%, 26% and 22% respectively) and 1,4-androstadiene-3,17-dione (ADD) (little amount). Optimum conditions for the side chain cleavage of cholesterol and 3 beta-acetyl-cholesterol by Mycobacterium sp. M12 were studied.