The presence of a trifluoromethyl group has implications on the enantioselective biotransformation of ethyl 4,4,4-trifluoro-acetoacetate with Saccharomyces cerevisiae (Baker's yeast). Reaction of the trifluoro-keto ester with the aqueous solvent leads to hydration of the carbonyl group and reduces bioavailability of the substrate. The hydrate forms an equilibrium with the enol and the keto substrate which was investigated in detail and was shown to be dependent on temperature and pH. Bioemulsifiers released in the reaction medium by the microorganism increase hydration rates substantially. Implications of hydration are most effective under fed-batch conditions. Batch processes remain unaffected, but suffer from xenobiotic stress of the substrate. Under fermentation conditions the enol fraction amounts to more than twice the concentration of the keto-form. Competing stereoselective reduction of the enol is discussed to possibly affect the overall enantioselectivity of the biotransformation.