In view of the biochemical reaction catalyzed by enzyme powder suspended in a water-insoluble organic solvent, an equation was derived to estimate the amount of water bound to the enzyme powder. With this equation, an apparent adsorption isotherm between free water (water freely dissolved in benzene) and bound water (water bound to crude lipase powder of Pseudomonas fluorescens) was obtained. A direct lactonization reaction (synthesis of cyclopentadenolide from 15-hydroxypen-tadecanoic acid) catalyzed by crude lipase powder of Pseudomonas fluorescens was carried out batchwise in microaqueous benzene at 40oC. A kinetic model of the enzymatic reversible lactonization reaction was derived, from which the effect of moisture content on the initial reaction rate with a fully hydrated enzyme was mathematically expressed. The observed initial reaction rate first increased, then decreased with increasing moisture content, giving rise to the maximum rate at a certain level of the moisture content. The drop in the reaction rate at lower moisture content was due to a lesser hydration of the enzyme molecule (hydration-limited) and the decrease in the reaction rate at higher moisture content was attributed to the dependence of the true initial rate of the reversible reaction on the moisture content (true reversible reaction limited), and could be simulated by the kinetic model. The equilibrium yield approached 100% at a lower moisture content.