Microbial bioconversion of a given substrate is considered an efficient and eco-friendly tool for value-added industrial compound generation from natural products. Among natural products, unsaturated fatty acids have been used as substrates to produce various functional hydroxy fatty acids. In this study, we report the production of 7,10-dihydroxy-8(E)-hexadecenoic acid (DHD) from palmitoleic acid by a new strain, Pseudomonas aeruginosa KNU-2B. KNU-2B efficiently produced DHD from palmitoleic acid and required a strong alkaline condition for maximum DHD production. The maximum DHD amount produced under pH 10.0 and 48-h incubation at 27 degrees C and 150 rpm was 219.5 mg/100 mL culture. Other important nutritional factors were also investigated to obtain optimum DHD production.