This study investigated the kinetic characteristics of asymmetric bioreduction of ethyl 4-chloro acetoacetate (ECA) to produce (S)-4-chloro-3-hydroxybutyric acid ethyl ester (S-CHBE) by baker’s yeast in a water-organic solvent biphasic system. Exactly how several organic solvents affect reaction performance was studied first. Among the solvents tested, petroleum ether exhibited the optimum reaction efficiency. Compared with the aqueous system, reaction yield was enhanced from 74.5% to 84.0%, and the product’s ee increased from 82.3% to 88.0% after 10% petroleum ether was added. The kinetic behavior of asymmetric bioreduction of ECA in the petroleum ether-water biphasic system was then examined by using a mathematical model. Kinetic analysis reveals that the maximal reaction rate and affinity between the substrate and the biocatalyst were both lower in the biphasic system than in the aqueous system. Additionally, the substrate inhibition effect was greater in this biphasic system than in the aqueous system. However, the ratio of the formation rate for producing S-CHBE to that for producing R-CHBE in the biphasic system was significantly higher than that in the aqueous system. Moreover, adding petroleum ether reduced spontaneous ECA degradation markedly. These two kinetic characteristics explain why the biphasic system exhibited a higher yield and a better product’s ee (enantiomeric excess) than the aqueous system.