(S)-(4-Chlorophenyl)-(pyridin-2-yl)methanol [(S)-CPMA] is an important chiral intermediate of anti-allergic drug Betahistine. Carbonyl reductase-producing microorganisms were isolated from soil samples for the stereoselective reduction of (4-chlorophenyl)-(pyridin-2-yl)methanone (CPMK) to (S)-CPMA. Among over 400 microorganisms isolated, one strain exhibiting the highest activity was selected and identified as Kluyveromyces sp. After optimization, the biotransformation reaction catalyzed by Kluyveromyces sp. CCTCC M2011385 whole-cell gave product (S)-CPMA in 81.5% ee and 87.8% yield at substrate concentration of 2 g/L in aqueous phase. Using an aqueous two-phase system (ATPs) consisted of PEG4000 (20%, w/w) and Na2HPO4 (14%, w/w), the product reached 86.7% ee and 92.1% yield at a higher substrate concentration of 6 g/L. The substrate tolerance and biocompatibility of microbial cells are greatly improved in ATPs by accumulating substrate/product in the upper PEG solution. This study, for the first time, reports the production of (S)-CPMA catalyzed by microbial cells. (c) 2012 Elsevier Ltd. All rights reserved.