Rhodococcus rhodochrous PA-34 has been reported to produce nitrile hydratase enzyme that converts 3-cyanopyridine to nicotinamide. A mutant of R. rhodochrous PA-34 was generated through chemical mutagenesis using N-methyl-N-nitro-N-nitrosoguanidine (MNNG) that exhibited 2 times higher nitrile hydratase activity as compared to wild strain. The reaction conditions using resting cells of this mutant strain for the conversion of nicotinamide were optimized. Under the optimized reaction conditions the mutant strain exhibited maximum nitrile hydratase activity [7.8 U/mgdcm (milligram dry cell mass)] at 55 degrees C in 0.3 M potassium phosphate buffer (pH 5.5).