Alpha-ethylation is concomitant with the reduction of aromatic beta-ketonitriles catalyzed by whole-cell biocatalysts. Use of isolated carbonyl reductase has completely eliminated this competing reaction. (R)-beta-Hydroxy nitriles were obtained via a reduction catalyzed by a recombinant carbonyl reductase with excellent optical purity and were further converted to (R)-beta-hydroxy carboxylic acids via a nitrilase-catalyzed hydrolysis. The present study allows ready access to both chiral beta-hydroxy nitriles and beta-hydroxy carboxylic acids of pharmaceutical importance.