Streptomyces galilaeus OBB-111 and its blocked mutant were found to convert aclacinomycin B and related anthracycline glycosides of the B type to the corresponding A-type glycosides. Only the cell fraction of cultures of S. galilaeus OBB-111 was capable of catalyzing the reaction. The activity was associated with growth but disappeared before the start of rapid production of aclacinomycins A and B.