BACKGROUND: Liquid emulsion membrane (LEM)-encapsulated live cells can be used to produce various products. This work reports on LEM-encapsulated cells for producing xylitol and models the production process. RESULTS: Encapsulated cells of Candida mogii ATCC 18364 were used to produce xylitol from xylose. Soybean oil LEM consisting of 5% (w/v) lanolin and microwaxes was found most suitable for this process. The LEM-encapsulated cells were immobilized in a tubular biocatalytic loop. Xylitol was produced under oxygen-limited and aerobic conditions. Xylitol productivity and yield were 0.005 g L-1 h(-1) and 0.52 g g(-1), respectively, for oxygen-limited operation. Under aerobic conditions, xylitol productivity increased greatly to 0.022 g L-1 h(-1), but yield on xylose declined to 0.49 g g(-1). A mathematical model successfully described substrate consumption and product formation in the LEM-immobilized cell system. CONCLUSION: Potentially, immobilized cell LEM systems are useful for certain fermentations and they can be successfully modeled, as shown by the example of xylitol from xylose process. (C) 2009 Society of Chemical Industry