Microbial production of (2S,3S)-2,3-dihydro-3-hydroxy-2-(4-methoxyphenyl)-1,5- benzothiazepin-4(5H)-one [(2S,3S)-DHMB], a key intermediate in the synthesis of diltiazem hydrochloride, was investigated. In the course of the screening of microorganisms for the hydrolysis of 3-acetoxy-2-(4-methoxyphenyl)-1,5-benzothiazepin-4(5H)-one (AMB), the genera Alcaligenes, Arthrobacter, Bacillus, and Rhodococcus were found to give (2S,3S)-DHMB from AMB directly at high conversion levels (67-77%) with excellent enantioselectivity [>99% enantiomeric excess (e.e.)]. By using Bacillus sphaericus FERM P-6746, which afforded the highest conversion, the following reaction pathway was postulated : (RS)-2-(4-methoxyphenyl)-1,5-benzothiazepin-3 ,4(2H,5H)-dione [(RS)-MBD] was an intermediate, from which the selective reduction subsequently proceeded. This hydrolytic enzyme was induced by AMB. This microbial conversion process provides an efficient method for the synthesis of diltiazem hydrochloride because fewer processes are required and the product can be obtained with a high yield.