The transesterification activity, autolysis, thermal stability and conformation of subtilisin Carlsberg, made soluble in dioxane by covalent linking to methoxypoly(ethylene glycol) (PEG), were investigated as a function of the concentration of water in the medium. Electrospray mass spectrometry showed that the modified enzyme preparation was a mixture of proteins containing from 2 to 5 covalently linked PEG chains per subtilisin molecule. PEG-subtilisin catalyzed transesterification between vinyl butyrate and 1-hexanol was optimum at 0.55 M H 2 O, while hydrolysis prevailed above 2 M H 2 O. There was a decrease in the overall enzyme activity with increasing water concentration because of autolysis and denaturation of the enzyme. Subtilisin powder and celiteimmobilized subtilisin were more stable and less susceptible to autolysis than the PEG-modified enzyme. Circular dichroism and intrinsic protein-fluorescence studies showed that the conformation of PEG-subtilisin did not change as a function of water concentrations between 0 and 9 M. The K m,app value of PEG-subtilisin for 1-hexanol was highly influenced by water, which behaved as a competitive inhibitor in the transesterification reaction with an affinity for the enzyme similar to that of the alcohol. The K m,app for the acylating agent was not significantly modified by water. Lyoprotectants such as sorbitol and free PEG did not influence the activity of PEGsubtilisin but notably increased the activity of subtilisin powder and celite-immobilized subtilisin. The addition of 1.7-5.5 M water, however, rendered enzyme preparations containing no additives as active as those containing the lyoprotectants.