Naphthalene 1,2-dioxygenase from Pseudomonas sp. NCIB 9816-4 and biphenyl dioxygenase from Beijerinckia sp. B8/36 oxidized the aromatic N-heterocycle carbazole to 3-hydroxycarbazole. Toluene dioxygenase from Pseudomonas putida F39/D did not oxidize carbazole. Transformations were carried out by mutant strains which oxidize naphthalene and biphenyl to cis-dihydrodiols, and with a recombinant E. coli strain expressing the structural genes of naphthalene 1,2-dioxgenase from Pseudomonas sp. NCIB 9816-4. 3-Hydroxycarbazole is presumed to result from the dehydration of an unstable cis-dihydrodiol.