A natural phenoxazinone derivative, cinnabarinic acid (2, CA, R = CO2H), could be obtained in vitro with the aid of purified laccase from the fungi Pycnoporus cinnabarinus by oxidative dimerization of 3‐hydroxyanthranilic acid (1, 3‐HAA, R = CO2H). With the aim of gaining access to a new class of water‐soluble chromophores and potential bioactive molecules, the regioselective sulfonation of 2‐hydroxyaniline was investigated. Straightforward insertion of a sulfonate group into a carbon–metal bond provided an efficient and selective process for the synthesis of 3‐hydroxyorthanilic acid (3, 3‐HOA, R = SO3H). This sulfonated compound was then subjected to laccase oxidation in order to mimic the cinnabarinic acid synthesis. A practical HPLC method to study the oxidized products was developed, and the major product of biotransformation – namely 2‐amino‐3‐oxo‐3H‐phenoxazin‐1,9‐disulfonic acid (4, LAO, R = SO3H) – was isolated and identified as the sulfonate analogue of cinnabarinic acid.(© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2008)