Enzymatic oxidation of ethanol and butanol was conducted with alcohol oxidase in a one-phase system of water and a two-phase system of water and toluene. The conversion of the reaction in the two-phase system was higher than that in the one-phase system. The inhibition of the enzyme was relies ed in the two-phase system by extracting the aldehyde product into the organic phase. The dissolved oxygen concentration in the water phase also affected the reaction rate. A kinetic model of the reaction was developed by considering both the inhibition of enzyme activity and the dissolved oxygen concentration. Parameters used in the model were evaluated experimentally. The reaction rate calculated using the model was in good agreement with the data.