The enzymatic conversion of cholesterol to cholestenone by cholesterol oxidase (Brevibacterium sp.)in reversed micelles in a system composed of AOT/isooctane/water/cholesterol has been examined. The catalytic activity of the enzyme was correlated with the physicochemical properties of water in water-in-oil (w/o) microemulsion systems. In a system consisting of 3 wt % AOT in isooctane, reversed micelles started to form as the [H(2)O]/[AOT] (e.g., the w(0)) ratio increased above 4-5. The formation of reversed micelles with a core of neat (bulk) water was verified from determinations of both the partial molar volume of water and the scissors vibration of water [with Fourier transform infrared (FTIR) spectroscopy] in the w/o microemulsion systems. A plot of enzyme activity vs. w(0) indicated that the hydration of enzyme molecules per se was not sufficient to give rise to catalytic activity. Instead, it appeared that the formation of an aqueous micellar core was necessary for full activation of the enzyme. Based on micelle size distribution analysis, it was estimated that about one micelle per one thousand contained an enzyme molecule. Since the apparent reaction rate could be markedly enhanced by increasing the enzyme/water ratio, we conclude that the number of enzyme-containing micelles was an important rate-limiting factor in the system.