Screening of fungal and bacterial strains allowed selection of two Streptomyces strains (S. platensis and S. cinnamonensis) that oxidatively cleave, in moderate to high yields (up to 65% in 24 h), the quinonic ring of a thiazole fused 1,4-naphthoquinone compound, INO5042, used as a model compound for a series of homologous substituted heterocyclic naphthoquinones. The respective products of these whole-cell biotransformations were identified as isomeric phenol-carboxylie acids resulting from a C-C bond cleavage at a position vicinal to each one of the carbonyl groups. The culture and incubation conditions have been optimised and the mechanism of this biotransformation investigated using oxygen isotope incorporation. The results of O-18(2) incorporation indicate a dioxygenase reaction, the mechanism of which is discussed in relation with that of hydroquinone-epoxidases, a family of oxygenating enzymes involved in the biosynthesis of polyketide antibiotics in Streptomyces.