Escherichia coli cells expressing phenol hydroxylase (designated as PHIND) were used to biosynthesize 1,2-dihydroxydibenzofuran (1,2-dihydroxyDBF) from dibenzofuran (DBF). The pathway of DBF biotransformation by strain PHIND was proposed, in which DBF was initially monohydroxylated at C-1 and C-4 positions to produce 1- and 4-hydroxyDBF, then underwent successive hydroxylation to yield 1,2- and 3,4-dihydroxyDBF, of which 1,2-dihydroxyDBF was identified for the first time. Magnetically immobilized cells of strain PHIND in biphasic systems with dodecane as the solvent presented highest biosynthesis activity for 1,2-dihydroxyDBF, which was a 6.5-fold improvement compared to biosynthesis in aqueous system. The recycling experiments demonstrated that magnetically immobilized cells exhibited higher biosynthesis activity for 1,2-dihydroxyDBF than that by nonmagnetically immobilized cells during five cycles in biphasic systems. These works support the development of an efficient biosynthesis process using magnetically immobilized cells in biphasic systems and provide a promising technique for improving the productivity in 1,2-dihydroxyDBF biosynthesis. (C) 2015 Elsevier Ltd. All rights reserved.