Esterification of organic acids and alcohols in aqueous media is very inefficient due to thermodynamic constraints. However, fermentation processes used to produce organic acids and alcohols are often conducted in aqueous media. To produce esters in aqueous media, biphasic alginate beads with immobilized lipase are developed for in situ esterification of butanol and butyric acid. The biphasic beads contain a solid matrix of calcium alginate and hexadecane together with 5 mg/mL of lipase as the biocatalyst. Hexadecane in the biphasic beads serves as an organic phase to facilitate the esterification reaction Under optimized conditions, the beads are able to catalyze the production of 0.16 mmol of butyl butyrate from 0.5 mmol of butyric acid and 1.5 mmol of butanol. In contrast, when monophasic beads (without hexadecane) are used, only trace amount of butyl butyrate is produced. One main application of biphasic beads is in simultaneous fermentation and esterification (SFE) because the organic phase inside the beads is very stable and does not leach out into the culture medium. SFE is successfully conducted with an esterification yield of 6.32% using biphasic beads containing is o-octane even though the solvent is proven toxic to the butanol-producing Clostridium spp. (C) 2015 Elsevier Inc. All rights reserved.