Caffeic acid phenethyl ester (CAPE) is a natural and rare ingredient with several biological activities, but its industrial production using lipase-catalyzed esterification of caffeic acid (CA) and 2-phenylethanol (PE) in ionic liquids (ILs) is hindered by low substrate concentrations and long reaction time. To set up a high-efficiency bioprocess for production of CAPE, a novel dimethyl sulfoxide (DMSO)-IL co-solvent system was established in this study. The 2% (by volume) DMSO-[Bmim][Tf2N] system was found to be the best medium with higher substrate solubility and conversion of CA. Under the optimum conditions, the substrate concentration of CA was raised 8-fold, the reaction time was reduced by half, and the conversion reached 96.23%. The kinetics follows a ping-pong bi-bi mechanism with inhibition by PE, with kinetic parameters as follows: V-max = 0.89 mmol . min(-1) . g(-1), K-m,K-CA = 42.9 mmol . L-1, K-m,K-PE = 165.7 mmol . L-1, and K-i,K-PE = 146.2 mmol . L-1. The results suggest that the DMSO co-solvent effect has great potential to enhance the enzymatic synthesis efficiency of CAPE in ILs. (C) 2014 The Chemical Industry and Engineering Society of China, and Chemical Industry Press. All rights reserved.