Results of an integrated approach for the improvement of progesterone 11 alpha-hydroxylation by Rhaopus nigricans which is one of the key steps in the production of corticosteroid drugs and hormones are presented Several issues have been addressed in order to increase process productivity including biocatalyst immobilization improvement in the solubility of the lipophilic substrate setting-up of continuous reaction process and easing downstream processing After preliminary studies on the effects on Rhaopus nigricans morphology fungal pellets of a desired size and structure could be obtained The mycelia grown in spherical agglomerates further enabled its continuous use in the process of biotransformation The problem of low steroid solubility was addressed by the addition of organic solvents or beta-cyclodextrin In order to develop an integrated biotransformation process a continuous two-liquid phase extraction within microchannel device has been set up where very efficient steroid extraction was achieved within a few seconds (C) 2010 Elsevier BV All rights reserved