Finasteride (MK-0906), a drug used for the treatment of benign prostatic hyperplasia, is a highly specific inhibitor of steroid 5 alpha-reductase, an enzyme that converts testosterone (T) to dihydrotestosterone (DHT) in animals and humans. In a study to evaluate the effect of finasteride on the growth of green alga, Selenastrum capricornutum, the parent drug was not detected by HPLC in the posttreatment (14 day) samples, suggesting complete biotransformation. Thermospray LC/MS, followed by NMR analysis, indicated that the major algal metabolite was 11 alpha-hydroxy-finasteride. This metabolite has negligible in vitro bioactivity against human prostatic 5 alpha-reductase; its potency is only 2% that of finasteride. The primary metabolite of finasteride produced by the green alga involved a biotransformation not previously observed in mammalian and human studies. The green alga effectively deactivates the drug, thereby mitigating any potential environmental impact.