The bioconversion cholesterol to cholestenone in an aqueous organic solvent two-phase system using free cells of Arthrobacter simplex U-S-3011 was described. The reactions were carried out in a 500-mL stirred-tank reactor loaded with potassium phosphate buffer and carbon tetrachloride (3:1, v/v). It was found that 93% of added cholesterol was converted to cholestenone within 2.5 h under the following conditions : working volume, 300 ml; temperature, 30 degrees C; agitation speed, 800 rpm; and aeration rate, 100 ml oxygen min(-1). The productivity was 12.4 g L(-1) h(-1). Some factors concerning the two-phase reactors were investigated. It was found that the bioconversion could be inhibited by either a high concentration of substrate or product, and it could be promoted by increasing the agitation speed. However, the enzyme was easily denatured by interface tension. It is confirmed that the water content in a two-phase system is an important parameter for the bioconversion. Under the optimal operation conditions, 94.6% of added cholesterol could be converted to cholestenone within 4 h. The maximum productivity as 26.3 g L(-1) h(-1).