Abstract: A process for the stereoselective microbial reduction of compound of formula II to compound of formula I ##STR1## comprising adding compound of formula II to a medium, medium and buffer, medium and solvent, or medium and a mixture of buffer and solvent containing a microorganism, preferably Rhodococcus fascians ATCC No. 202210 or fungal isolate Geotrichum candidum ATCC No. 74487, incubating the resulting mixture, and isolating a hydroxy compound of formula I, is described. The compound of formula I is a serum cholesterol lowering agent.

Abstract: A stereoselective reduction of compound II to compound of formula I ##STR1## which comprises adding ketone substrate II to a culture broth of the Zygosaccharomyces bailii ATCC 38924, incubating the resulting mixture, and isolating a hydroxy compound of formula I, is described. The resulting compound of formula I is useful as an intermediate in the preparation of 1-(4-fluorophenyl)-3(R)-[3(S)-hydroxy-3-(4-fluorophenyl)propyl]-4(S)-(4-hy droxyphenyl)-2-azetidinone which is a serum cholesterol lowering agent. Also described is a stereoselective reduction of a compound of formula IV to compound of formula III ##STR2## using Schizosaccharomyces octosporus ATCC 2479.