Product removal from aqueous media poses a challenge in biotechnological whole-cell biotransformation processes in which substrates and/or products may have toxic effects. The assignment of an additional liquid solvent phase provides a solution, as it facilitates in situ product recovery from aqueous media. In such two-phase systems, toxic substrates and products are present in the aqueous phase in tolerable but still bioavailable amounts. As a matter of course, adequate organic solvents have to possess hydrophobicity properties akin to substrates and products of interest, which in turn involves intrinsic toxicity of the solvents used. The employment of bacteria being able to adapt to otherwise toxic solvents helps to overcome the problem. Adaptive mechanisms enabling such solvent tolerant bacteria to survive and grow in the presence of toxic solvents generally involve either modification of the membrane and cell surface properties, changes in the overall energy status, or the activation and/or induction of active transport systems for extruding solvents from membranes into the environment. It is anticipated that the biotechnological production of a number of important fine chemicals in amounts sufficient to compete economically with chemical syntheses will soon be possible by making use of solvent-tolerant microorganisms.