Batch and continuous hydrolysis of olive oil in an organic-aqueous two-phase system using the live whole cell of Pseudomonas putida 3SK as a source of lipase is investigated. The strain was not only fully viable and grown well, but also produced extracellular lipase simultaneously. The degree of hydrolysis, depending on olive oil concentration in the solvent, was maximal at 13.5% (w/v) and decreased with the increase of the substrate concentration. At the optimal condition, a degree of hydrolysis higher than 95% was achieved within 24 h at 30 degrees C when the reaction was carried out in a two-phase batch stirred reactor. For long-term operation a continuous stirred reactor was designed. When the reaction was carried out in a continuous stirred reactor, the degree of hydrolysis reached 86% at a dilution rate of 0.2 h(-1). Satisfactory performance of a two-phase bioreactor was obtained in a long-term continuous operation, which fasted for at least 30 days by feeding organic solvent containing olive oil and aqueous media separately,