Baeyer-Villiger biooxidation of 4-methylcyclohexanone-5-methyloxepane-2-one catalysed by recombinant Escherichia coli overexpressing cyclopentanone monooxygenase encapsulated in polyelectrolyte complex capsules was used to investigate effect of substrate conversion on the viability of cells. Confocal laser scanning microscopy (CLSM) was used to assess cell viability using propidium iodide fluorescence marker for necrosis, and flavin autofluorescence to identify living bacteria. Viability of encapsulated cells decreased with increasing substrate concentration from 99 ± 1 to 83 ± 4%, while substrate conversions from decreased 100 to 6 ± 1%. Storage stabilization of encapsulated cells was observed by increased substrate conversion form 68 ± 2 to 96 ± 3%. Measurements by CLSM with standard deviations up to 5% may be regarded as powerful tool for recombinant cell viability determination during Baeyer-Villiger biooxidations.