A recombinant oleate hydratase from Lysinibacillus fusiformis converted ricinoleic acid to a product, whose chemical structure was identified as the novel compound 10,12-dihydroxystearic acid by gas chromatograph/mass spectrometry, Fourier transform infrared, and nuclear magnetic resonance analysis. The reaction conditions for the production of 10,12-dihydroxystearic acid were optimized as follows: pH 6.5, 30 °C, 15 g l(-1) ricinoleic acid, 9 mg ml(-1) of enzyme, and 4 % (v/v) methanol. Under the optimized conditions, the enzyme produced 13.5 g l(-1) 10,12-dihydroxystearic acid without detectable byproducts in 3 h, with a conversion of substrate to product of 90 % (w/w) and a productivity of 4.5 g l(-1) h(-1). The emulsifying activity of 10,12-dihydroxystearic acid was higher than that of oleic acid, ricinoleic acid, stearic acid, and 10-hydroxystearic acid, indicating that 10,12-dihydroxystearic acid can be used as a biosurfactant.