A focus of our lab is the design and construction of in vivo biochemical factories consisting of novel multi-step metabolic pathways. On advantage of in vivo biological catalysis is also one of the biggest challenges, namely, the requirement for mild, aqueous conditions to sustain growth. In the context of multi-step chemical synthesis, this presents an obstacle towards the use of enzymes that are most effective under conditions that differ significantly from those of the intracellular environment. Cell surface display has been employed for many years, most notably as a means of building and screening protein libraries for optimized variants. The technology has also been used in biocatalysis to produce “immobilized” (cell-entrapped) enzymes that are less vulnerable to inactivation by changes in temperature or solvent environment. We aim to use cell surface display technology for integrated bioprocessing, in which the neutral intracellular environment is separated from an extracellular medium that can be either acidic or basic in order to favor the activity of recombinant enzymes. This is demonstrated with the anchoring of 1,4-lactonase (human PON1), which reversibly hydrolyzes lactones in a pH-dependent manner, for the microbial production of 1,4-lactones from 4-hydroxyacids. The lactonization reaction of PON1 is favored under acidic conditions. We will present results on the use of surface-anchored PON1 in E. coli and P. putida to produce hydroxyvalerolactone from 4-hydroxyvalerate. In the final configuration, the intracellular environment will promote the formation of precursor molecules that are then exported to an acidic extracellular medium for final conversion. Utilizing the extracellular space in addition to the intracellular environment for bioconversions affords a new level of biochemical pathway engineering that addresses a need for “functional composability” that may arise from the recruitment of enzymes from diverse sources.