Catalysis, stability, and thermostability of yeast hexokinase were determined in the microenvironments of two organic solvent/Triton X-100/phospholipids systems. In the abscence of enzyme, phase diagrams showed two transparent/turbid transitions, and reverse micelles were only observed in the second region of transparency (T2), where particle size as a function of water content shows a minima (see previous paper in this issue). In the present work, enzyme activity was detected throughout the four regions of the phase diagrams of these systems. Catalysis increased with water content; nevertheless, the maximum activities that were reached in the toluene and propylbenzene systems were 30 and 1.6%, respectively, of the activity in all aqueous media. Because in the T2 region in the propylbenzene system, micelles are much smaller than in toluene (see preceding paper), it would appear that expression of catalysis depends on the size of the micelles. However, a comparison of the dimensions of hexokinase and those of reverse micelles in the T2 region, suggests that in this region, hexokinase entrapment increases the inner volume of the micelle. High enzyme thermostability was only observed in the first transparent region (T1) of the system that contained phospholipids. In this region, hexokinase induced the formation of reverse micelles from dispersed surfactant monomers. There is a striking similarity in the dimensions of hexokinase entrapped in reverse micelles as determined by dynamic light scattering measurements in the T1 region with those of hexokinase as obtained from X ray diffraction studies of the enzyme in a crystalline environment. This suggest that high thermostability, and low catalytic rates result from restrictions in mobility imposed by a low water environment.