The activity of penicillin acylase has been studied in aq. and org. solvents, as free enzyme as well as immobilized within the membrane of liq.-core capsules. The activity of the enzyme is inhibited by the accumulation of the products of the hydrolysis reaction, namely Ph acetic acid (PAA). In order to overcome this inhibition a range of org. solvents were tested for use in in situ product recovery. Of these solvents di-Bu sebacate (DBS) was chosen due to the rapid extn. rate, the high logP and to facilitate capsule prodn. The extn. efficiency at pH 3.5 for PAA was >80% for phase ratios of >50% free solvent with partition coeffs. of 8 and 0.7 for PAA and penicillin G (PenG), resp., thereby showing that PAA could be selectively extd. at pH 3.5 and 25 DegC. Liq.-core capsules contg. DBS were shown to efficiently remove PAA selectively and the PAA could be effectively backextd. and the capsules re-used in a three-stage process resulting in high product sepn. Immobilization of penicillin acylase onto the capsule membranes resulted in increased operational stability of the enzyme and a very high enzyme activity. Over 53.3% of the PAA formed could be recovered in the capsule core with a concn. over sevenfold higher than in the aq. phase. Higher extn. efficiencies could be obtained by varying the substrate concn. and no. of capsules. The enzyme immobilized on capsules could be stored for over 4 mo at pH 8 and 4 DegC with no loss of activity. Over 80% of the initial activity could be recovered over five repeated batch cycles of the bioconversion process. The importance of capsular perstraction and reactive capsular perstraction has been clearly demonstrated. [on SciFinder (R)]