The whole cells of the microorganism were used as a source of intracellular enzyme without cell disintegration and complex purification of enzyme. Benzoylformate was converted to benzaldehyde using both free whole-cell enzyme (benzoylformate decarboxylase) from Pseudomonas putida cells and the whole-cell enzyme immobilized in a calcium alginate liquid-core capsule. Cells inoculated in calcium alginate capsules were cultured for 2 days in a medium containing a large amount of nitrogen sources and then cultured successively, for 1 day in a new medium containing a large amount of phosphate. In a free whole-cell enzyme survey, benzaldehyde produced by the catalysis of whole-cell benzoylformate decarboxylase was consecutively converted to benzyl alcohol by benzyl alcohol dehydrogenase. Encapsulation of whole-cell enzymes gave a resistance of mass transfer in a capsule membrane which caused a lagging of appearance of benzaldehyde in the reaction medium. However, there was no production of benzyl alcohol, and benzaldehyde was produced ceaselessly even at the low initial concentration of benzoylformate until the reactant was consumed entirely. Encapsulated whole-cell enzyme from P. putida could be reused to produce benzaldehyde from benzoylformate without formation of benzyl alcohol and retained 60% initial activity after 30 batches.