Penicillin G acylase (PGA) catalyzed acylation of 7-aminocephalosporanic acid (7-ACA) with R-mandelic acid and its derivatives gives 7[(I-hydroxy-l-phenyl)-acetamido]-3-acetoxymethyl-Delta(3)-cephem-4-carb oxylic acid. This compound is a useful intermediate for the synthesis of some 3'-functionalized cephalosporins. However, acylations catalyzed by PGA isolated from Escherichia coli give poor results both considering a kinetical or a thermodynamical approach. In order to improve this enzymatic acylation, polyethylene glycol (PEG 600)-ammonium sulphate aqueous two-phase systems have been studied with the aim to have, during the reaction, a continuous extraction of the acylation product outside of the enzyme environment (the ammonium sulphate phase). This strategy shifts the equilibrium in the thermodynamically controlled synthesis and prevents the hydrolysis of the synthesized antibiotic in the kinetically controlled synthesis. The best results were achieved using PEG 600 (80% in water) equilibrated with 4 M ammonium sulphate. In these conditions, the acylation product was completely partitioned in the PEG phase (K > 200), whereas the substrates maintained a suitable concentration in the enzyme environment. Both in the kinetic (88% yield) and the thermodynamic (75% yield) processes, the results obtained were sensitively improved in comparison with those achieved working in homogeneous solution (phosphate buffer). Using R-mandelic acid methyl ester, the yield increased from 65% (monophasic system) to 88%. The PEG solution, without isolation of the acylation product, was successfully used for the synthesis of Cefamandole and Cefonicid. (c) 2004 Elsevier Inc. All rights reserved.