The degradation rates of toluene and trichloroethylene (TCE) by Pseudomonas putida and Bacillus spp. that were encapsulated in polyethylene glycol (PEG) polymers were evaluated in comparison with the results of exposure to suspended cultures. PEG monomers were polymerized together with TCE-degrading microorganisms, such that the cells were encapsulated in and protected by the matrices of the PEG polymers. TCE concentrations were varied from 0.1 to 1.5 mg/L. In the suspended cultures of P. putida, the TCE removal rate decreased as the initial TCE concentration increased, revealing TCE toxicity or a limitation of reducing power, or both. When the cells were encapsulated, an initial lag period of about 10-20 h was observed for toluene degradation. Once acclimated, the encapsulated P. putida cultures were more tolerant to TCE at an experimental range of 0.6-1.0 mg/L and gave higher transfer efficiencies (mass TCE transformed/mass toluene utilized). When the TCE concentration was low (e.g., 0.1 mg/L) the removal of TCE per unit mass of cells (specific removal) was significantly lower, probably due to a diffusion limitation into the PEG pellet. Encapsulated Bacillus spp. were able to degrade TCE cometabolically. The encapsulated Bacillus spp. gave significantly higher values than did P. putida in the specific removal and the transfer efficiency, particularly at relatively high TCE concentration of approximately 1.0±0.5 mg/L. The transfer efficiency by encapsulated Bacillus spp. in this study was 0.27 mgTCE/mgToluene, which was one to two orders of magnitude greater than the reported values.