The ability to produce (R)- or (S)-beta-phenylalanine ethyl ester (3-amino-3-phenylpropionic acid ethyl ester, BPAE) from racemic BPAE through stereoselective hydrolysis was screened for in BPAE-assimilating microorganisms. Sphingobacterium sp. 238C5 and Arthrobacter sp. 219D2 were found to be potential catalysts for (R)-and (S)-BPAE production, respectively. On a 24-h reaction, with 2.5% (w/v) racemic BPAE (130 mM) as the substrate and wet cells of Sphingobacterium sp. 238C5 as the catalyst, 1.15% (w/v) (R)-BPAE (60 mM) with enantiomeric purity of 99% e.e. was obtained, the molar yield as to racemic BPAE being 46%. On a 48-h reaction, with 2.5% (w/v) racemic BPAE (130 mM) as the substrate and wet cells of Arthrobacter sp. 219D2 as the catalyst, 0.87% (w/v) (S)-BPAE (45 mM) with enantiomeric purity of 99% e.e. was obtained, the molar yield as to racemic BPAE being 35%. The enzyme stereoselectively hydrolyzing (S)-BPAE was purified to homogeneity from the cell-free extract of Sphingobacterium sp. 238C5. The enzyme was a monomeric protein with a molecular mass of about 42,000. The enzyme catalyzed hydrolysis of beta-phenylalanine esters, while the common aliphatic and aromatic carboxylate esters were not catalyzed.