A growing cell culture of Pseudomonas oleovorans was used to biotransform 1,7-octadiene to 1,2-epoxy-7,8-octene in a continuous-flow bioreactor with an external membrane module. A dense silicone rubber membrane was used to contact an organic phase, containing both the reactant (1,7-octadiene) and the growth substrate (heptane), with an aqueous biomedium phase containing the biocatalyst. Heptane and octadiene delivery to the aqueous phase, and epoxide extraction into the solvent, occurred by diffusion across the dense membrane under a concentration-driving force. In addition, a liquid feed of heptane and octadiene was pumped directly into the bioreactor to increase the rate of delivery of these compounds to the aqueous phase. In this system 1,2-epoxy-7,8-octene accumulated in a pure solvent phase, thus, product recovery problems associated with emulsion formation were avoided. Furthermore, no phase breakthrough of either liquid across the membrane was observed. In this system, the highest volumetric productivity obtained was 30 U.L-1, and this was achieved at a dilution rate of 0.07 h(-1), 70 m(2).m(-3) of membrane area, and a steady-state biomass concentration of 2.5 g.L-1. The system was stable for over 1250 h. Decreasing the dilution rate led to an increased biomass concentration, however, the specific activity was significantly reduced, and therefore, an optimal dilution rate was determined at 0.055 h(-1).