The flavanoid hesperidin (Hsd) is one of the major polyphenols in citrus fruits. Hsd and its aglycone hesperetin (Hst) have a broad array of bioactivities; however, their low aqueous solubility and low intestinal permeability lead to their limited oral bioavailability. In the present study, we generated two water-soluble derivatives of Hst, namely, Hst 7-O-phosphate and Hst3′-O-phosphate, by a unique bioconversion process of Bacillus subtilis var. natto BCRC80517. The phosphorylated products showed superior aqueous solubility and distinct physicochemical properties compared with the original Hst. The Hst phosphate derivatives (HstPs) remained stable in simulated gastric and intestinal fluids for 240 min and could revert to the original Hst form by alkaline phosphatase treatment in Caco-2 cells, showing enhanced intestinal permeability in vitro. After oral administration in rats, HstPs greatly elevated plasma exposure to Hst and showed better bioavailability than did Hsd. HstPs may be a potential and efficient alternative to Hst.