Three new ether-functionalized hydrophobic ionic liquids (ILs) were synthesized. Two proteases (subtilisin and alpha-chymotrypsin both covalently immobilized on chitosan) exhibited high synthetic activity (1-3 mu mol/min center dot g) and selectivity (> 97-99%, esterification over hydrolysis) in these ILs containing 10-15% (v/v) water during the transesterification of N-acetyl-l-phenylalanine ethyl ester with 1-propanol. However, the same reaction in t-butanol or [BMIM][Tf2N], with water contents higher than 2% (v/v) yielded low synthetic activities (0.2-1 mu mol/min g in t-butanol) and/or poor selectivity (< 40%). The high synthetic activities of proteases in ether-functionalized ILs at high water contents are explained by two reasons: (1) the hydrogen-bond donors in ILs (R-1-O-R-2) and chitosan (-OH) controlling the thermodynamic water activity of the reaction system, and (2) the protective role of the ether chain in reducing the cation-protein interaction.