Recombinant Escherichia coli whole-cell biocatalysts harboring either a Baeyer-Villiger monooxygenase or ferulic acid decarboxylase were employed in organic-aqueous two-phase bioreactor systems. The feasibility of the bioproduction of water-insoluble products, viz., lauryl lactone from cyclododecanone and 4-vinyl guaiacol from ferulic acid were examined. Using hexadecane as the organic phase, 10 similar to 16 g of lauryl lactone were produced in a 3-l bioreactor that operated in a semicontinuous mode compared to 2.4 g of product in a batch mode. For the decarboxylation of ferulic acid, a new recombinant biocatalyst, ferulic acid decarboxylase derived from Bacillus pumilus, was constructed. Selected solvents as well as other parameters for in situ recovery of vinyl guaiacol were investigated. Up to 13.8 g vinyl guaiacol (purity of 98.4%) were obtained from 25 g of ferulic acid in a 2-l working volume bioreactor by using octane as organic phase. These selected examples highlight the superiority of the two-phase biotransformations systems over the conventional batch mode.