We found that the asymmetric reduction of ethyl acetoacetate (EAA) to ethyl (R)-3-hydroxybutyrate (EHB) by Paracoccus denitrificans could be induced by nitrate addition under anaerobic conditions. However, the addition of electron donors such as glucose, ethanol, and methanol together with nitrate did not stimulate EHB production from EAA. When the reaction was carried out under optimum conditions (cell concentration, 10 g-d.w. l(-1); EAA, 150 mM; NO3-, 100 mM), after 8 h of reaction 49 mM of EHB with an optical purity of 98.9% e.e. was produced. Furthermore, a fed-batch reaction was carried out with an intermittent addition of nitrate and EAA to reduce substrate inhibition. The linear reduction of EAA to EHB proceeded for 40 h after initiation of the reaction, and finally 124 mM of EHB with an optical purity of 88.7% e.e. was produced after 104 h.