The present study describes the biotransformation of a commercially available crude extract of soy isoflavones, which contained significant amounts of the soy isoflavone glycosides daidzin and genistin, by recombinant Escherichia coli expressing tyrosinase from Bacillus megaterium. Two major products were isolated from the biotransformation and identified as 3'-hydroxydaidzin and 3'-hydroxygenistin, respectively, based on their mass and nuclear magnetic resonance spectral data. The two 3'-hydroxyisoflavone glycosides showed potent 2,2-diphenyl-1-picrylhydrazyl free radical scavenging activity with IC50 values of 7.4 and 9.8 mu M for 3'-hydroxydaidzin and 3'-hydroxygenistin, respectively. The free radical scavenging activities of the two 3'-hydroxyisoflavone glycosides were, respectively, 120 and 72 times higher than the activity of their precursors, daidzin and genistin, and were also stronger than the activity of ascorbic acid, which showed an IC50 value of 15.1 mu M. This is the first report of the bio-production and potential antioxidant applications of both 3'-hydroxydaidzin and 3'-hydroxygenistin.