The naturally occurring monoterpene 1,3,3-trimethyl-2-oxabicyclo[2.2.2]octane 1, commonly named 1,8-cineole and the major component in the leaf oil of many eucalypts, exhibits bioactivity, being potentially antimicrobial and pesticidal. A range of derivatives of 1,8-cineole and its naturally occurring isomeric analogue 1,4-cineole 2, 1-isopropyl-4-methyl-7-oxabicyclo[2.2.1]heptane, were synthesised. High-cineole eucalyptus oil, 1,8-cineole and the 1,8- and 1,4-cineole derivatives were shown to have a dose dependent pre-emergence and post-emergence herbicidal activity against radish (Raphanus sativus var. Long Scarlet), and annual ryegrass (Lolium rigidum) in laboratory bioassays. A postulated increase in activity of the ester derivatives due to metabolic cleavage into their bioactive hydroxy-cineole and carboxylic acid portions after uptake by the plant was not observed. The role of mallee eucalypts in the rehabilitation of degraded farmland in the Western Australian wheat belt, uses of eucalyptus oil and the bioactivity of essential oils and naturally occurring terpenes, with particular emphasis on eucalyptus oil and 1,8-cineole, were reviewed. The review encompasses allelopathic and herbicidal activity, insecticidal, acaricidal and antimicrobial activity. 1,8-Cineole compounds functionalised at position 3 of the cyclohexane ring and the 1,4-cineole derivatives were chemically synthesised whilst 2-endo-hydroxy-1,8-cineole was obtained as the primary metabolite of a novel bacterium grown on 1,8-cineole as sole carbon source. The bacteria were isolated by inoculating liquid growth medium containing 1,8-cineole as carbon source with aliquots of deionised water in which eucalyptus leaves had been stirred. Sequencing of its 16S rRNA gene identified the bacteria as belonging to the order Sphingomonadales, family Sphingomonadaceae and genus Sphingomonas. Growth curves for the bacterium are described and a metabolic pathway for the microbial degradation of 1,8-cineole is confirmed. Bacteria were cultured on a 20 L scale to provide sufficient 2-endo-hydroxy-1,8-cineole for the herbicidal bioassays.