The enzyme catalyzed synthesis of cephalexin (CEX) from 7-amino-3-deacetoxycephalosporanic acid (7-ADCA) and D-phenylglycine methyl ester (PGM) by Penicillin G acylase (PGA) is a model for kinetically controlled synthesis. The parallel hydrolysis of PGM, the activated acyl donor, is the principle competing pathway in this reaction, limiting the synthetic yield and reaction efficiency. To improve the performance of PGA catalyzed CEX synthesis, the biocompatibility and selectivity of various co-solvents were investigated. Polybasic alcohols such as ethylene glycol, glycerol and PEG400 did not cause deleterious changes to the enzyme, whereas monobasic alcohols, such as butyl alcohol, disrupted the PGA activity. Compared with the reaction in aqueous medium, the use of ethylene glycol as a co-solvent was found to have good selectivity in order to facilitate CEX synthesis and significantly minimize PGM hydrolysis. The pH of ethylene glycol medium was also optimized. The mechanism of the enhanced effect of polybasic alcohols as co-solvents on both biocompatibility and selectivity of enzymatic kinetically controlled synthesis is suggested.