An organism isolated from soil and identified as Arthrobacter sp. was studied for its squalene degradation. The degradation product from squalene, which accumulated in the culture broth, was isolated and identified as trans-geranylacetone by mass spectrometry, gas chromatography, infrared spectrometry, and nuclear magnetic resonance spectrometry. Addition of a high concentration of K2HPO4 to the culture medium resulted in accumulation of fairly large amounts of carboxylic acids in addition to geranylacetone. These carboxylic acids were identified as isovaleric, beta,beta'-dimethylacrylic, geranic, and (plus)-(R)-citronellic acids. Among these acids, alpha,beta-saturated carboxylic acids were found to be predominant in quantity.