After complexation with beta-cyclodextrin, the phenolic steroid 17 beta-estradiol could be ortho-hydroxylated into a catechol, mainly 4-hydroxyestradiol, by a phenoloxidase from in vitro grown cells of Mucuna pruriens. By complexation with beta-cyclodextrin the solubility of the steroid increased from almost insoluble to 660 microM. The bioconversion efficiency after 72 hr increased in the following order: freely suspended cells (0%), immobilized cells (1%), cell homogenate (6%), phenoloxidase preparation (40%). Mushroom tyrosinase converted 17 beta-estradiol, as a complex with beta-cyclodextrin, solely into 2-hydroxyestradiol, with a maximal yield of 30% after 6-8 hr. Uncomplexed 17 beta-estradiol was not converted at all in any of these systems.