Hydrophobic interactions are important in numerous biological processes; however, the nature and extent of hydrophobic interactions in nonaqueous enzymology remain poorly defined. We have estimated the free energies of enzyme--substrate hydrophobic interactions for a model reaction catalyzed by subtilisin BPN'(from Bacillus amyloliquefaciens) in various solvents. Transition state stabilization of subtilisin in water has contributions from both ground state destabilization of hydrophobic substrates and intrinsic enzyme--substrate hydrophobic interactions. Both contributions are evident even in hydrophobic organic solvents and can be modified by protein engineering of the enzyme's binding site, as well as by changing the hydrophobicity of the reaction medium. We have also developed a method to estimate the hydrophobicity of the enzymic transition state involving systematic variation of the substrate and solvent hydrophobicities. The observed binding pocket hydrophobicities were directly affected by replacing the Gly166 residue, located at the back of hydrophobic S1 binding pocket of subtilisin BPN', with more hydrophobic amino acids such as alanine and valine. Thus, the observed S1 binding pocket hydrophobicities of the wild-type, G166A, and G166V mutants were measured to be 1.2, 1.8, and 2.6 log P units, respectively. Our method of calculating effective binding pocket hydrophobicity was found to be applicable to other enzymes, including horseradish peroxidase and alpha-chymotrypsin. Measurements of the binding pocket hydrophobicities have significant implications toward tailoring enzyme function in aqueous as well as nonaqueous media.