A novel cell-immobilization technique was developed in this study for increasing substrate partition to the gel matrix by coating a polyurea thin layer on the surface of Ca-alginate beads. The proposed method was simple and could be performed under mild conditions. The bioconversion of progesterone to 11 alpha-hydroxyprogesterone with these polyurea-coating alginate-entrapped Aspergillus ochraceus cells was investigated using different organic solvents in biphasic media. The reaction medium of ethyl acetate could markedly enhance the bioconversion rate with the existence of a hydrophobic layer, most likely resulting from the increasing partition of substrate to gel matrix Bioconversion with higher substrate concentration was possible using an ethyl acetate-water medium. The conversion rate increased almost linearly with increasing substrate concentration from 10 to 80 g l(-1). The rate with 80 g l(-1) progesterone increased up to sir times greater than the rate with the immobilized cells without coating, and also exhibited a much higher rate than that reported in the literature.