The direct one-step synthesis of L-phenylalanine methyl ester in an organic-aqueous biphasic system using phenylalanine ammonia lyase (E.C.4.3.1.5, PAL) containing Rhodotorula glutinis yeast whole cells was reported earlier. We report here further optimization of this biotransformation using isolated PAL, when the lyophilized enzyme is treated with different water miscible and water immiscible organic solvents. Use of isolated PAL enzyme is advantageous in overcoming diffusion barriers encountered when using PAL containing R. glutinis whole cells, and resulted in increased product yield due to better interaction of enzyme with the substrate. Among the water miscible solvents, ethanol treated and methanol treated enzymes supported maximum PAL forward and reverse activities; respectively. In the water immiscible solvents category, heptane-treated enzyme exhibited maximal activity for both PAL forward and reverse reactions. PAL activity obtained with enzyme specimens treated with methanol, ethanol, and heptane varied in the range of 9199% of that observed in aqueous buffer medium for the forward reaction; and 8995% for the reverse reaction. n-butanol, acetone, and benzene were found to have a inhibitory effect on PAL enzyme, in that, it resulted in only 3133% activity of that obtained with aqueous solution. Raman spectroscopy was used to monitor amide I and II bands which are sensitive to changes in the secondary structure of proteins. No changes in structure could be detected from the analyses of AI and AII bands of PAL spectra. This data obtained for PAL, a tetramer, could be significant in predicting how solvent interactions affect the structure and function of multimeric proteins and enzymes in nonaqueous media. (C) 2011 American Institute of Chemical Engineers Biotechnol. Prog., 2011