A natural precursor (L) of streptomycin which had no antibiotic potency was obtained from mycelium suspension of Streptomyces griseus in glucose solution and was transformed to streptomycin by H enzyme obtained from mycelium of the organism. This transforming reaction was carried out most effectively at slightly alkaline pH and inhibited by inorganic phosphate and ethylenediaminetetraacetate. L component was considered to be a phosphorylated compound and liberation of the phosphoric acid was essential for L component to be transformed to streptomycin. This transformation was performed not only by H enzyme but also by intestinal alkaline phosphatase, although some difference in the reaction mechanism was supposed to be between those two enzymes.