A biodegradable solvent was used in a two-phase aqueous-organic system for hydrophobic VOC (volatile organic compounds) elimination by activated sludge. Unlike usual two-phase aqueous-organic systems where the organic phase is chosen nonbiodegradable in view of its recycling, in this study the solvent was assimilated by micro-organisms simultaneously with the VOC. The chosen solvent and VOC were hexadecane and toluene. Experiments showed in a first step that activated sludge were able to assimilate part of hexadecane at different phase ratios (5and 10% v/v) and a higher biomass growth was obtained for the lower ratio. Toluene was removed simultaneously with organic solvent elimination; cells were readily able to completely consume the toluene available at low and even at high concentrations within 48 h (0.2 and 4.3 g L−1 in the organic phase), even if they were not previously preadapted to these substrates. Consequently, a two-phase partitioning bioreactor conception with a biodegradable solvent can be envisaged. © 2010 American Institute of Chemical Engineers Environ Prog, 2011.