A novel short-chain alcohol dehydrogenase from Paracoccus pantotrophus DSM 11072, which is applicable for hydrogen transfer, has been identified, cloned, and overexpressed in E. coli. The enzyme stereoselectively reduces several ketones in a sustainable substrate-coupled approach using 2-propanol (5% v/v) as hydrogen donor. The enzyme maintained its activity in organic co-solvents in biphasic as well as monophasic systems and was even active in micro-aqueous media (1% v/v aqueous buffer). In general, a higher conversion was observed at higher log P values of the solvent, however, DMSO, which exhibits the lowest log P value of all solvents investigated, was not only tolerated but led to a higher conversion and relative activity (110-210%). For example, the conversion after 24 h in 15% v/v DMSO was double that for the reaction performed in buffer. This tolerance to DMSO may be attributed to the ability of the wild-type strain to adapt and grow in media with high sulfur content.