Piceatannol is a valuable natural polyphenol with therapeutic potential in cardiovascular and metabolic disease treatment. In this study, we screened for microorganisms capable of producing piceatannol from resveratrol via regioselective hydroxylation. In the first screening, we isolated microorganisms utilizing resveratrol, phenol, or 4-hydroxyphenylacetic acid as a carbon source for growth. In the second screening, we assayed the isolated microorganisms for hydroxylation of resveratrol. Using this screening procedure, a variety of resveratrol-converting microorganisms were obtained. One Gram-negative bacterium, Ensifer sp. KSH1, and one Gram-positive bacterium, Arthrobacter sp. KSH3, utilized 4-hydroxyphenylacetic acid as a carbon source for growth and efficiently hydroxylated resveratrol to piceatannol without producing any detectable by-products. The hydroxylation activity of strains KSH1 and KSH3 was strongly induced by cultivation with 4-hydroxyphenylacetic acid as a carbon source during stationary growth phase. Using the 4-hydroxyphenylacetic acid–induced cells as a biocatalyst under optimal conditions, production of piceatannol by strains KSH1 and KSH3 reached 3.6 mM (0.88 g/L) and 2.6 mM (0.64 g/L), respectively. We also cloned genes homologous to the monooxygenase gene hpaBC from strains KSH1 and KSH3. Introduction of either hpaBC homolog into Escherichia coli endowed the host with resveratrol-hydroxylating activity.