The inclusion complexes induced by cyclodextrins and its derivates have been shown previously to enhance the biotransformation of hydrophobic compounds. Using hydroxypropyl-beta-cyclodextrin (HP-beta-CD; 20% w/v), the water solubility of cortisone acetate increased from 0.039 to 7.382 g L(-1) at 32 degrees C. The solubilization effect of HP-beta-CD was far superior to dimethylformamide (DMF) and ethanol. The dissolution rate also significantly increased in the presence of HP-beta-CD. The enzymatic stability of Delta(1)-dehydrogenase from Arthrobacter simplex TCCC 11037 was not influenced by the increasing concentrations of HP-beta-CD contrary to the organic cosolvents which negatively influenced in the order DMF > ethanol. The activity inhibition effect caused by HP-beta-CD was not so conspicuous as ethanol and DMF. Inactivation constants of ethanol, DMF, and HP-beta-CD were 5.832, 4.541, and 1.216, respectively. The inactivation energy (E (a)) was in the order of HP-beta-CD (55.1 kJ mol(-1)) > ethanol (39.9 kJ mol(-1)) > DMF (37.1 kJ mol(-1)).