Aims This study examined the biotransformation pathway of ginsenoside Rb1 by the fungus Esteya vermicola CNU 120806. Methods and Results Ginsenosides Rb1 and Rd were extracted from the root of Panax ginseng. Liquid fermentation and purified enzyme hydrolysis were employed to investigate the biotransformation of ginsenoside Rb1. The metabolites were identified and confirmed using NMR analysis as gypenoside XVII and gypenoside LXXV. A mole yield of 95.4% gypenoside LXXV was obtained by enzymatic conversion (pH 5.0, temperature 50 degrees C). Ginsenoside Rd was used to verify the transformation pathway under the same reaction condition. The product Compound K (mole yield 49.6%) proved a consecutive hydrolyses occurred at the C-3 position of ginsenoside Rb1. Conclusions Strain CNU 120806 showed a high degree of specific beta-glucosidase activity to convert ginsenosides Rb1 and Rd to gypenoside LXXV and Compound K, respectively. The maximal activity of the purified glucosidase for ginsenosides transformation occurred at 50 degrees C and pH 5.0. Compared with its activity against pNPG (100%), the beta-glucosidase exhibited quite lower level of activity against other aryl-glycosides. Enzymatic hydrolysate, gypenoside LXXV and Compound K were produced by consecutive hydrolyses of the terminal and inner glucopyranosyl moieties at the C-3 carbon of ginsenoside Rb1 and Rd, giving the pathway: ginsenoside Rb1? gypenoside XVII ? gypenoside LXXV; ginsenoside Rd?F2?Compound K, but did not hydrolyse the 20-C, beta-(1-6)-glucoside of ginsenoside Rb1 and Rd. Significance and Impact of the Study The results showed an important practical application on the preparation of gypenoside LXXV. Additionally, this study for the first time provided a high efficient preparation method for gypenoside LXXV without further conversion, which also gives rise to a potential commercial enzyme application.