A procedure for the direct one-step synthesis of L-phenylalanine methyl ester, a precursor of the artificial sweetener, aspartame, by using phenylalanine ammonia lyase (PAL)-containing Rhodotorula glutinis cells in a 2:1 heptane : 0.1 M Tris-sulfate buffer pH 9.0 biphasic system was reported earlier; however, the yeast cells lost PAL activity rapidly during the reaction and were rendered unsuitable for repeated use. Stabilization of the enzyme during the biotransformation for the continuous use is described. Immobilization of PAL containing Rhodotorula glutinis cells by different conventional methods could not prevent the inactivation of the enzyme. The addition of a low concentration of Mg2+ to the incubation mixtures resulted in significant stabilization of PAL which was further enhanced by the presence of glycerol. At 4 mM MgSO4 and 10% glycerol concentrations, the systems could produce L-phenylalanine methyl ester for nine cycles of repeated use while the controls lost activity by the fourth cycle. The total yield of L-phenylalanine methyl ester in nine cycles was 92 g l(-1).