1. 14C-Paxilline incubated in bile from pasture-fed sheep was efficiently transformed to a more polar dioxygenated derivative in which the indole 2,3 double-bond had opened to give an 8-membered ring. The structure is proposed on the basis of mass spectrometry and 1H- and 13C-n.m.r. spectroscopy. The new compound is 2,18-dioxo-2,18-seco-paxilline. 2. The paxilline transformation also occurred in bile which had been boiled to inactive enzymes. 3. The dissolved oxygen concentration in freshly collected sheep bile was in the range 38-163 nmol/ml. 4. Whereas paxilline causes pronounced tremor in the mouse given 4 mg/kg i.p., the dioxygenated paxilline was biologically inactive at ten times this dose. 5. The feasibility that analogous oxidative transformation of indole-diterpenoid tremorgenic mycotoxins may occur, increasing polarity advantageously to xenobiotic elimination, during biliary elimination from agricultural ruminants in the field, is recognized. Concomitant loss of tremorgenicity is an additional benefit. 6. The biotransformation of paxilline in sheep bile was mimicked by ozonolysis but the ozone equivalent 4-t-butyl-iodoxybenzene was not similarly effective.