A key intermediate, S-(-)-3-benzoylthio-2methylpropanoic acid ( 1 ) w a s made in high optical purity by the lipase-catalyzed stereoselective esterification of racemic 1 with methanol in an organic solvent system. Among various lipases evaluated, Amano P-30 lipase from Pseudomonas sp. efficiently catalyzed the esterification of 1 to yield R-(+) methyl ester and unreacted S -( -) 1. A reaction yield of 40 mol% and an optical purity of 97.2% were obtained for compound 1 at a substrate concentration of 0.1 M (22 mg/ml). Lipase P-30 was immobilized on Accurel polypropylene (PP) and the immobilized enzyme was reused (23 cycles) in the esterification reaction without loss of enzyme activity, productivity or optical purity. Among various solvents evaluated, toluene was found to be the most suitable organic solvent and methanol was the best alcohol for the esterification of racemic 1 by immobilized lipase. Substrate concentrations as high as 1.0 M were used in the esterification reaction. When the temperature was increased from 28°C to 60 °C, the reaction time required for the esterification of 0.1 M substrate decreased from 16 h to 2 h. On increasing the methanol to substrate molar ratio from 1:! to 4:1, the rate of esterification decreased. A lipase fermentation using Pseudomonas sp. ATCC 21 808 was developed. In the batch-fermentation process, 56 units/ml of extracellular lipase activity was obtained. A fed-batch process using soybean oil gave a significant increase in the lipase activity (126 units/ml). Crude lipase recovered from the filtrate by ethanol precipitation and immobilized on Accurel PP was also effective: S -( -) compound 1 was obtained in 35 mol% yield and 95% optical purity.