Peptide synthesis in the aqueous polymer two-phase system was examined. Water soluble polymers adopted were dextran and polyethyleneglycol (PEG). By the modification of a proteolytic enzyme, trypsin, with dextran carrying a very small number of carboxyl groups, a separation of the enzyme from its peptide product, N-benzoyl-L-arginine glycinamide, which is relatively more soluble in a PEG phase could be realized. This separation drastically reduced a so-called "mass-law" effect, and increased the yield of the reaction product. The aqueous polymer two-phase system would be useful to enhance the usefulness of biocatalysts in organic syntheses.