Serine hydroxymethyltransferase (SHMT) in the form of crude extract form a recombinant strain of Klebsiella aerogenes was used to study the production of L-serine from glycine and formaldehyde (HCHO). SHMT activity linearly increased with temperature (30–50°C). Addition of exogenous cofactors, tetrahydrofolic acid and pyridoxal–phosphate, significantly increased SHMT activity. The pH optimum of the SHMT catalyzed L-serine synthesis step was between 8.0 and 8.5. The Km for glycine was 11.6mM at 37°C and pH 8.0. A 87% molar conversion of glycine to serine was obtained at equilibrium (37°C, pH 8.0). Tetrahydrofolic acid was stabilized by maintaining the redox potential of the reaction solution below –330 mV through the addition of a reducing reagent such as β-mercaptoethanol. SHMT stability was very sensitive to HCHO concentration. By carefully balancing the HCHO feed rate against the enzymatic bioconversion rate in order to keep HCHO concentration low, a serine titer of 160 g/L was achieved, the residual glycine concentration was reduced to 40 g/L, a 70% molar conversion of glycine with quantitative yield was obtained, and the overall serine productivity was 5.2 g/L/h.