Biocatalytic processes may offer a cheaper alternative to natural production of valuable compounds. Caffeic acid [3,4-dihydroxycinnamic acid] (1) metabolism was studied using for the first time the fungus Absidia corymbiferaa cosmopolitan filamentous phytopathogenic fungus as a biocatalyst. Results show that caffeic acid is converted to Ferulic acid [Caff-AM-1], 3,4-dimethoxy-cinnamic acid[Caff-AM-2] and 4-hydroxycinnamyl alcohol [Caff-AM-3]. The structures of the metabolic products were elucidated on the basis of their spectral data. A possible metabolic pathway of the biotransformation and the antioxidant activity using DPPH radical scavenging assay and lipid peroxidation assay by thiobarbituric acid reactive substances (TBARS) method using rat tissue homogenates is also discussed.