Recombinant Escherichia coli (E. coli) displaying lipase on the cell surface was examined as a whole cell biocatalyst for enantioselective resolution of racemic compounds. The Pseudomonas fluorescens lipase was displayed on the cell surface of E. coli by fusing the lipase gene to the Salmonella typhimurium outer membrane protein C (OmpC) gene by C-terminal deletion-fusion strategy. The localization of truncated OmpC-lipase fusion protein was confirmed by confocal microscopy and whole cell lipase activity. As an application for enantioselective biocatalyst. whole cell bioconversion was examined using cell surface displayed lipase. When racemic ethyl 3-hydroxybutyrate, methyl mandelate and cis-3-acetoxy-4-phenylazetidin-2-one were used as substrates, (R)-3-hydroxybutyric acid, (S)-mandelic acid and (3S, 4R)-cis-3-hydroxy-4-phenylazetidin-2-one were successfully obtained with the enantiomeric excess of greater than 99%. The cell surface displayed lipase was found to be maintained without much loss of activity and selectivity during 10 repeated reactions over 120 h. These results suggest that cell surface displayed lipase has a high enantioselectivity, broad substrate specificity and reusability, which makes it an excellent system for the production of various optically active compounds. (C) 2004 Elsevier Inc. All rights reserved.