The use of a recombinant yeast producing a P4501A1-yeast reductase fused enzyme for the regiospecific hydroxylation of naphthalene to alpha-naphthol is reported. During the biotransformation, significant levels of naphthalene and alpha-naphthol were detected in the cell fraction. Initial reaction rates of up to 23 and 13 mumol/g dry cell weight/h at 5.6 and 11.2 g dcw/l, respectively, were measured. The presence of naphthalene at concentrations above aqueous phase saturation (0.45 mM) as a solid was found to increase activity only marginally while the product, alpha-naphthol, was found to inhibit hydroxylating activity. (C) 2003 Elsevier Inc. All rights reserved.