Microbial transformation is an effective tool for the structural modification of bioactive natural and synthetic compounds leading to synthesis of more potent derivatives. Its application in asymmetric synthesis is increasing due to its versatility and ease. This article presents biotransformation of sesquiterpenoid ketone, (+)-Nootkatone (1) by M. phaseolina, a plant pathogenic fungus. The transformation afforded four main compounds. They were determined to be 1:6 stereoisomeric mixture of 11,12-dihydroxy-11,12-dihydronootkatone (2, 3), 13-hydroxynootkaone (4) and 12-hydroxy-11,12dihydronootkatone (5) with the help of EI-MS, HR-FAB-MS(pos), HR-FAB-MS (neg), 1H-NMR, 13CNMR, COSY-450, NOESY, HMBC, HMQC spectral analyses. The compound 4 was firstchandana-amarasingha-samayawardana-avifauna-Bundala-1.1-28.07 identified as Nootkatone metabolites in this study. Further, the parental compound (1) and the transformed products 4 and 5 were found to be present significant antiprotozoal activity.