The reductase (PgCR) from recombinant Escherichia coli CCZU-Y10 displayed high reductase activity and excellent stereoselectivity for the reduction of ethyl 4-chloro-3-oxobutanoate (COBE) into ethyl (S)-4-chloro-3-hydroxybutanoate ((S)-CHBE). To efficiently synthesize (S)-CHBE (> 99 % enantiomeric excess (ee)), the highly stereoselective bioreduction of COBE into (S)-CHBE with the whole cells of E. coli CCZU-Y10 was successfully demonstrated in a dibutyl phthalate-water biphasic system. The appropriate ratio of the organic phase to water phase was 1:1 (v/v). The optimum reaction temperature, reaction pH, cosubstrate, NAD(+), and cell dosage of the biotransformation of 100 mM COBE in this biphasic system were 30 A degrees C, 7.0, mannitol (2.5 mmol/mmol COBE), 0.1 mu mol/(mmol COBE), and 0.1 g (wet weight)/mL, respectively. Moreover, COBE at a high concentration of (1,000 mM) could be asymmetrically reduced to (S)-CHBE in a high yield (99.0 %) and high enantiometric excess value (> 99 % ee). Significantly, E. coli CCZU-Y10 shows high potential in the industrial production of (S)-CHBE (> 99 % ee).