A mutant of neomycin-producer Streptomyces fradiae was obtained from cultures mutagenized with neutron radiation. Utilizing the mutational strain which can not produce neomycin in normal culture, the biotransformation of neomycin was studied at different conversion conditions. The analysis results of fermentation broth by high performance liquid chromatography showed that the culture conditions such as the concentration of substrate, adding time of substrate, adding method of substrate, inoculation amount, the volume of medium, transformation time, carbon sources, nitrogen sources, pH of media and temperature had different influence on neomycin transformation. The transformation products of neomycin were isolated from a large scale fermentation broth by ion exchange chromatography and identified by thin layer chromatography. The antibacterial activity of four purified samples against Staphylococcus aureus, Erwinia carotovora and Pseudomonas solanacarum were tested by bioautographic analysis. All four samples showed obvious inhibitory activity against Staphylococcus aureus and Pseudomonas solanacarum, but only one sample had inhibitory effect against Erwinia carotovora.