Ginseng saponin, the most important secondary metabolite in ginseng, has various pharmacological activities. Many studies have been directed towards converting major ginsenosides to the more active minor ginsenoside, Rg3. Due to the difficulty in preparing ginsenoside Rg3 enzymatically, the compound has been mainly produced by either acid treatment or heating. A microbial strain GS514 was isolated from soil around ginseng roots in a field and used for enzymatic preparation of the ginsenoside Rg3. Blast results of the 16S rRNA gene sequence of the strain GS514 established that the strain GS514 belonged to the genus Microbacterium. Its 16S rRNA gene sequence showed 98.7%, 98.4% and 96.1% identity with those of M. esteraromaticum, M. arabinogalactanolyticum and M. lacticum. Strain GS514 showed a strong ability to convert ginsenoside Rb1 or Rd into Rg3. Enzymatic production of Rg3 occurred by consecutive hydrolyses of the terminal and inner glucopyranosyl moieties at the C-20 carbon of ginsenoside Rb1 showing the biotransformation pathway: Rb1-->Rd-->Rg3.