The lactonohydrolase-catalyzed stereospecific lactonization of o-pantoic acid (D-PA) to o-pantoyl lactone (D-PL) was shown to be a promising reaction for the optical resolution of racemic PA. When 385 mM DL-PA was incubated with washed cells of Fusarium oxysporum AKU 3702 showing high lactonohydrolase activity at 30 degrees C for 14 h at pH 4.5-5, 40% of the PA was lactonized with an enantioselectivity of 83% ee for the D-isomer. In an organic solvent-water two-phase system in which an aqueous solution of 1,540 mM DL-PA (200 mg ml(-1) as DL-PL) containing 50 mM CaCl2 and cells was incubated with ethyl acetate at 30 degrees C for 20 h at pH 4.5-5, D-PA in the racemic mixture was almost stoichiometrically lactonized to D-PL (90% ee). This improvement Mms suggested to be due to a shift of the reaction equilibrium during the lactonization on extraction of the reaction product, i.e., D-PL into the organic phase.