Biocatalysis of ethyl 4-chloro-3-oxobutanoate (CUBE) to ethyl (S)-4-chloro-3-hydroxybutanoate [(S)-CHBE] was carried out using Escherichia coli co-expressing a carbonyl reductase gene from Pichia stipitis and a glucose dehydrogenase gene from Bacillus megaterium. An efficient polycistronic plasmid with a high-level of enzyme co-expression was constructed by changing the order of the genes, altering the Shine-Dalgarno (SD) regions, and aligned spacing (AS) between the SD sequence and the translation initiation codon. The optimal SD sequence was 5-TAAGGAGG-3, and the optimal AS distance was eight nucleotides. Asymmetric reduction of COBE to (S)-CHBE with more than 99% enantiomeric excess was demonstrated by transformants, using a water/ethyl caprylate system. The recombinant cells produced 1260 mM product in the organic phase, and the total turnover number, defined as moles (S)-CHBE formed per mole NADP(+), was 12,600, which was more than 10-fold higher than in aqueous systems. (C) 2010 Elsevier Ltd. All rights reserved.