Microbial transformation of racemic citronellol with Hansenula saturnus IFO 0809 was carried out on the interface between a hydrophilic carrier and a hydrophobic organic solvent (interface bioreactor). This system enabled the conversion of a high concentration of this toxic and hydrophobic compound. The strain accumulated (S)-citronellic acid of 70-85% e.e. as an oxidation product, leaving behind (R)-citronellol of 65-70% e.e. in the solvent layer. Using a large-scale, pad-packed interface bioreactor, (S)-citronellic acid (82% e.e.) and (R)-citronellol (77% e.e.) were accumulated at 18.0 and 17.8 g/l respectively in the decane layer.