The asymmetric reduction of ethyl 4-chloro-3-oxobutanoate (COBE) to ethyl (R)-4-chloro-3-hydroxybutanoate (CHBE) using Escherichia coli JM109 (pKAR) cells expressing the aldehyde reductase gene from Sporobolomyces salmonicolor AKU4429 as a catalyst was studied. The reduction required NADP(+) glucose and glucose dehydrogenase for NADPH regeneration. In an aqueous system, the substrate was unstable, and inhibition of the reaction by the substrate was also observed. Efficient conversion of COBE to (R)CHBE with a satisfactory enantiomeric excess (ee) was attained on incubation with transformant cells in an n-butyl acetate/water two-phase system containing the above NADPH-regeneration system. Under the optimized conditions, with the periodical addition of COBE, glucose and glucose dehydrogenase, the (R)-CHBE yield reached 1530 mM (255 mg/ml) in the organic phase, with a molar conversion yield of 91.1% and an optical purity of 91% ee. The calculated turnover of NADP(+), based on the amounts of NADP(+) added and CHBE formed, was about 5100 mol/mol.