The possibility of intraspecific and interspecific transformation in Bacillus with respect to antibiotic production has been investigated. In intraspecific transformation in B. subtilis 5 of 10 strains used as recipient were transformed; the frequency of transformation was 0.1-0.7%. Both antibiotically inactive and active strains could be transformed. A bacitracin producing strain, MB 294, of B. subtilis transformed 3 strains; an inactive strain, B(49)3, was transformed to the production of an antibiotic indistinguishable from bacitracin. MB 294 itself was transformed by only 1 of the 4 strains of B. subtilis used as donor; in one case it acquired the property of elaborating an antifungal antibiotic while retaining its antibacterial activity. All attempts at transformation of B. cereus, B. circulans, B. firmus, B. laterosporus and B. megaterium with B. subtilis DNA failed.