A comprehensive series of optimization studies including pH, solvent and temperature were completed on the nitrile hydrolyzing Rhodococcus erythropolis bacterium SET1 with the substrate 3-hydroxybutyronitrile. These identified temperature of 25 °C and pH of 7 as the best conditions to retain enantioselectivity and activity. The effect of the addition of organic solvents to the biotransformation mixture was also determined. The results of the study suggested that SET1 is suitable for use in selected organo-aqueous media at specific ratios only. The functional group tolerance of the isolate with unprotected and protected β-aminonitriles, structural analogues of β-hydroxynitriles was also investigated with disappointingly poor isolated yields and selectivity obtained. The isolate was further evaluated with the α- aminonitrile phenylglycinonitrile generating acid in excellent yield and ee (>99 % (S) – isomer and 50 % yield). A series of pH studies with this substrate indicated pH 7 to be the optimum pH to avoid product and substrate degradation.