The effect of water miscible solvents on Δ1-steroid reduction by free and polyacrylamide-hydrazide (PAAH) entrapped Mycobacterium sp. NRRL B-3805 cells was investigated. On the basis of retention of reductase activity an order of preference of diols (e.g. ethyleneglycol) > DMSO > DMF and monoalcohols (e.g. ethanol) as cosolvents was recorded. Significant increase in substrate (1,4-androstadiene-3,17-dione) solubility was attained in presence of the cosolvent of choice (ethyleneglycol), accompanied by some inhibition of the Δ1-reductase activity. Optimization of ethyleneglycol concentration (10-20% (v/v)) led to specific activity in a homogeneous medium, higher than recorded in the absence of cosolvent. Immobilization in PAAH gel resulted in high retention of immobilized enzymic activity, accompanied by minor diffusional limitations. Moreover, the gel exhibited protective effect of the entrapped cells from cosolvent inhibition. Modification of gel composition (e. g. hydrophobicity) had no significant effect on reaction kinetics.