A process for greatly improving the yields of cephalosporin nucleus produced by fermentation is described. Cephalosporin C-producing microorganisms are fermented in the presence of an acetylesterase enzyme so that cephalosporin C formed is immediately converted into desacetyl cephalosporin C before any non-enzymic degradation occurs. Fermentation to produce desacetyl cephalosporin C enables yield increases of cephalosporin nucleus of about 40% to be realized, and greater increases are possible if the fermentation is extended. The preferred cephalosporin C-producing organism is Acremonium chrysogenum, and mutants thereof that are capable of producing esterases in situ. Alternatively, esterases obtained from a variety of other sources may be added or formed in situ, for example from a strain of Rhodosporidium.