Human insulin-like growth factor I (IGF-I) accumulates in both folded and aggregated forms in the fermentation medium and cellular periplasmic space when expressed in E. coli with an endogenous secretory signal sequence. Due to its heterogeneity in form and location, low yield of IGF-I was obtained using a typical refractile body recovery strategy. To enhance recovery yield, a new procedure was developed to solubilize and extract IGF-I from cells while in fermentation broth. This method, called in situ solubilization, involves addition of chaotrope and reductant to alkaline fermentation broth and provides recovery of about 90% of all IGF-I in an isolated supernatant. To further enhance recovery, a new aqueous two-phase extraction procedure was developed which partitions soluble non-native IGF-I and biomass solids into separate liquid phases. This two-phase extraction procedure involves addition of polymer and salt to the solubilization mixture and provides about 90% recovery of solubilized IGF-I in the light phase. The performance of the solubilization and aqueous extraction procedures is reproducible at scales ranging from 10 to 1000 liters and provides a 70% cumulative recovery yield of IGF-I in the isolated light phase. The procedure provides significant initial IGF-I purification since most host proteins remain cell associated during solubilization and are enriched in heavy phase. ELISA analysis for E. coli proteins indicates that 97% of the protein in the light phase is IGF-I. Together, the techniques of in situ solubilization and aqueous two-phase extraction provide a new, high yield approach for isolating recombinant protein which is accumulated in more than one form during fermentation.