A bacterium, Rhodococcus equi SHB-121 forming 3-cyanopyridine hydratase was screened from soil polluted by nitriles according to the biomass and the enzyme activity. Its activity was the highest among 200 nitrile-utilizing bacteria isolated. The optimum formation conditions for the 3-cyanopyridine hydratase of SHB-121 have been studied. Under the optimum conditions, 5.3u/mg dry cell weight of specific activity was produced, and the coexistent amidase activity was very low. The specific activity of strain SHB-121 was about 95 times higher than that in primitive screening medium.