Escherichia coli cells were found to grow in poly(ethylene glycol) (PEG)/phosphate aqueous two-phase systems by selecting the phase-forming components and their concentrations, the tie-line length, and the phase volume ratio properly. The cells cultivated up to an optical density at 660 nm of 1.0 were disrupted by ultrasonic irradiation to release and recover overproduced beta-galactosidase. The surviving cells were found to grow immediately after ultrasonic irradiation. The PEG/phosphate (KH2-PO4-K2HPO4) system with added Na2SO4 was the one optimized for extractive cultivation of E. coli cells, where beta-galactosidase was selectively partitioned to the top phase while total soluble proteins and cells partitioned to the bottom phase. This integrated process was extended to a semicontinuous operating mode, where the top phase containing beta-galactosidase was removed following intermittent ultrasonic irradiation and the bottom phase containing cells was recycled together with the new top phase solution to repeat production and recovery of beta-galactosidase.