The antibiotic erythromycin is under FDA review for use in bacterial kidney disease control in salmon and trout. Evaluation of erythromycin fate in water, sediment, and the environment is required for its approval. A bioassay that utilizes a Xanthomonas spp, was developed to detect erythromycin concentrations <0.05 µg ml-1 in water and in sediments. Several environmental variables affect erythromycin transformation in aquaculture systems. In water, 12% of the applied erythromycin was hydrolyzed in 20-day incubation at 10 °C. The rate of hydrolysis increases with increasing temperature. Erythromycin is relatively stable under neutral to mildly alkaline pHs. However, it is susceptible to acid hydrolysis producing 8,9-anhydroerythromycin. Highly acidic or alkaline pHs result in cleavage of the amino-sugar disosamine and/or the neutral sugar cladinose producing erythronolides and erythralosamines. The anhydroerythromycin derivatives possesses a much reduced antimicrobial activity, whereas the cleavage of either or both of the sugar moieties resulted in total loss of antimicrobial activity. A variety of microorganisms in the aquaculture environment were capable of the transformation of erythromycin to metabolites lacking antimicrobial activity.