The phthalideisoquinoline alkaloid (-)-beta-hydrastine is one of the main active constituents of the medicinal plant, Hydrastis canadensis, which is used in many dietary supplements intended to enhance the immune system. Treatment of hydrastine with the fermentation broth of Polyporous brumalis (ATCC 34487) as a model for mammalian metabolism, gave a new alkaloid, (1S)-hydroxyhydrastine. Structure elucidation was based primarily on NMR and chiroptical studies.