Eighteen Pseudomonas aeruginosa strains were examined for their ability to convert oleic acid to produce 10-hydroxy-8(E)-octadecenoic acid (HOD), which was structurally confirmed by GC-MS, NMR, and FTIR. There were no substantial amounts of other new compounds found in the fermentation broths in addition to HOD and 7,10-dihydroxy-8(E)-octadecenoic acid (DOD). The results demonstrated that P. aeruginosa strains possessed varying levels of activity for producing HOD. Under the experimental conditions, strain NRRL B-14938 isolated from sheep manure was the best HOD producer exhibiting the highest HOD to DOD product ratio in the medium most suitable for purifying HOD. Using strain B-14938 as a model system for further characterization, optimum conditions for producing HOD were found to be at 26°C and pH 7.0 after 60 h of reaction time using a medium containing EDTA as a chelating agent. This study has identified a high-yielding P. aeruginosa strain and provided the reaction characteristics needed to develop a scale-up production process of HOD for testing its properties and potential new uses.