The present invention relates to newly identified microorganisms capable of direct production of hydroxytyrosol (hereinafter also referred to as Hy-T) from tyrosol. The invention also relates to polynucleotide sequences comprising genes that encode proteins which are involved in the synthesis of Hy-T from tyrosol. Also included are methods/processes of using the polynucleotides and modified polynucleotide sequences to transform host microorganisms. The invention also relates to genetically engineered microorganisms and their use for the conversion of tyrosol into Hy-T.