The ionic liquid (IL) Ammoeng110™ contains cations with oligoethyleneglycol units and was found to be highly effective for the formation of aqueous two-phase systems (ATPS) that can be used for the biocompatible purification of active enzymes. Above critical concentrations of the IL and an inorganic salt in aqueous solution, phase separation takes place resulting in the formation of an IL-enriched upper and a salt-enriched lower phase. For the optimization of the composition of IL-based ATPS with regard to the extraction of catalytically active enzymes, the Box–Wilson method of experimental design was successfully applied; IL-based ATPS proved to be suitable for the purification and stabilization of two different alcohol dehydrogenases (from Lactobacillus brevis and a thermophilic bacterium). Both enzymes were enriched in the IL-containing upper phase resulting in an increase of specific activity by a factor of 2 and 4 respectively. Furthermore, the presence of IL within the system provided the opportunity to combine the extraction process with the performance of enzyme-catalyzed reactions. The IL was found to exhibit a stability improving effect on both enzymes and a solubility enhancing effect on hydrophobic substrates. Thus the conversion and volumetric productivity of ADH catalyzed reduction of acetophenone could be increased significantly. Biotechnol. Bioeng. 2008;99: 1416–1424. © 2007 Wiley Periodicals, Inc.