Chiral 1-(o-chlorophenyl)-ethanols are key intermediates in the synthesis of chemotherapeutic substances. Enantioselective reduction of o-chloroacetophenone is a preferred method of production but well investigated chemo-and biocatalysts for this transformation are currently lacking. Based on the discovery that Candida tenuis xylose reductase converts o-chloroacetophenone with useful specificity (k(cat)/K-m = 340M(-1)s(-1)) and perfect S-stereoselectivity, we developed whole-cell catalysts from Escherichia coli and Saccharomyces cerevisiae co-expressing recombinant reductase and a suitable system for recycling of NADH. E. coli surpassed S. cerevisiae sixfold concerning catalytic productivity (3 mmol/g dry cells/h) and total turnover number (1.5 mmol substrate/g dry cells). o-Chloroacetophenone was unexpectedly "toxic," and catalyst half-life times of only 20 min (E. coli) and 30 min (S. cerevisiae) in the presence of 100 mM substrate restricted the time of batch processing to maximally similar to 5 h. Systematic reaction optimization was used to enhance the product yield (<= 60%) of E. coli catalyzed conversion of 100 mM o-chloroacetophenone which was clearly limited by catalyst instability. Supplementation of external NAD (0.5 mM) to cells permeabilized with polymyxin B sulfate (0.14 mM) resulted in complete conversion providing 98 mM S-1-(o-chlorophenyl)- ethanol. The strategies considered for optimization of reduction rate should be generally useful, however, especially under process conditions that promote fast loss of catalyst activity. Biotechnol. Bioeng. 2011;108: 797-803. (C) 2010 Wiley Periodicals, Inc.