The particulate fraction from the ergotamine-producing strain CLAVICEPS sp. PCCE1 catalyzed the conversion of [ (14)C]elymoclavine to paspalic acid. NADPH was required. Maximum conversion was 95%. Carbon monoxide (CO:0 (2), 4:1) and SK&F 525A (1.0 mM), cytochrome P-450 inhibitors, inhibited the conversion 94% and 50%, respectively. Minor amounts of paspalic acid (0.1 mg/1) were present in cultures. The particulate fraction from CLAVICEPS sp. SD 58, which accumulates elymoclavine in cultures, lacked activity for the conversion of elymoclavine to paspalic acid.