Lipase from Pseudomonas cepacia showed poor activity and moderate enantioselectivity (E) in pure aqueous systems for hydrolysis of a racemic mixture (+/-)-1-chloro-2-acetoxy-3-(1-naphthyloxy)-propane, (w)hich is a potential intermediate for P-blocker synthesis. However, addition of polar organic solvents to the reaction can change both the activity and the enantioselectivity for this chiral reaction significantly. It was observed, in general, that the activity increases and the enantioselectivity decreases with the increase in the polarity of the organic solvent added to the medium. Among the six solvents chosen (i.e., dimethylsulfoxide [DMSO], 1,4-dioxane, dimethylformamide [DMF], acetone, l-propanol, and tetrahydrofuran [THF]), maximum activity and minimum enantioselectivity was obtained with DMSO, whereas minimum activity and maximum enantioselectivity was obtained with THF as the cosolvents. In the subsequent studies, native or polyethylene glycol (PEG)modified lipase was immobilized by entrapping in Ca-alginate gel beads. In a fixed-bed continuous reactor containing these catalyst beads, the enzyme was found to be at feast three times more enantioselective than the native form in a batch reactor. This fixed-bed reactor with the beads could be operated with high concentration of acetone (33% v/v) for about 1 month without a significant loss of enzyme activity and enantioselectivity.