Formate dehydrogenase from Candida boidinii (CbFDH) is potentially applicable in reduction of CO2 through oxidation of cofactor NADH into NAD(+). For this, the CbFDH activity needs to be maintained under practical reaction conditions, such as CO2 gas-liquid flow. In this work, CbFDH and cofactor were encapsulated in liposomes and the liposomal enzymes were characterized in an external loop airlift bubble column. The airlift was operated at 45 degrees C with N-2 or CO2 as gas phase at the superficial gas velocity U-G of 2.0 or 3.0 cm/s. The activities of liposomal CbFDH/cofactor systems were highly stable in the airlift regardless of the type of gas phase because liposome membranes prevented interactions of the encapsulated enzyme and cofactor molecules with the gas-liquid interface of bubbles. On the other hand, free CbFDH was deactivated in the airlift especially at high U-G with CO2 bubbles. The liposomal CbFDH/NADH could catalyze reduction of CO2 in the airlift giving the fractional oxidation of the liposomal NADH of 23% at the reaction time of 360 min. The cofactor was kept inside liposomes during the reaction operation with less than 10% of leakage. All of the results obtained demonstrate that the liposomal CbFDH/NADH functions as a stable catalyst for reduction of CO2 in the airlift. (C) 2010 American Institute of Chemical Engineers Biotechnol. Prog., 26: 1047-1053, 2010