Microbial production of benzoylformic acid (BF), which can be used as a substrate of enzymatic synthesis of (R)-(-)-mandelic acid, was investigated. Among 145 strains of yeasts and actinomycetes, Saccharomycopsis lipolytica (IAM 4964) was the best producer of BF from DL-phenylglycine (DL-PG). Culture conditions for BF production by the organism were optimized. When 0.2 % fructose as a carbon source and 0.7 % Bacto-tryptone as a nitrogen source were used in the presence of 4 % DL-PG, 14.5 mg/ml of BF was produced (about 37 % molar yield) in 4 days of cultivation. BF was synthesized from the L-form of PG, but not from the D-form. The BF was isolated from culture broth in a crystalline form and physicochemically identified.