Abstract Extractive microbial fermentation of organic compounds in liquid–liquid two-phase systems is a potential strategy to overcome the limitations of microbial fermentation in an aqueous solution, such as low substrate solubility, substrate/product inhibition and product further degradation. A conventional aqueous–organic solvent two-phase system is inaccessible to extractive fermentation of a relatively high polar bioproduct as the confliction between the biocompatibility and the extraction ability of the corresponding organic solvent. An exploitation of cloud point system as a novel medium engineering method for extractive microbial fermentation is reviewed in present work. The relationship between phase separation of nonionic surfactant aqueous solution forming cloud point system and its corresponding biocompatibility to microorganisms, and the relationship between solubilization and bioavailability of organic compounds in a cloud point system are discussed. Paradigms of extractive microbial fermentation in cloud point system are highlighted with some cases in our lab. The downstream processing for nonionic surfactant recovery and product separation with microemulsion extraction is also presented.