The cyclodextrin glucanotransferase (CGTase) gene (cgt) from Bacillus circulans 251 was cloned into plasmid pYD1, which allowed regulated expression, secretion, and detection. The expression of CGTase with a-agglutinin at the N-terminal end on the extracellular surface of Saccharomyces cerevisiae was confirmed by immunofluorescence microscopy. This surface-anchored CGTase gave the yeast the ability to directly utilize starch as a sole carbon source and the ability to produce the anticipated products, cyclodextrins, as well as glucose and maltose. The resulting glucose and maltose, which are efficient acceptors in the CGTase coupling reaction, could be consumed by yeast fermentation and thus facilitated cyclodextrin production. On the other hand, ethanol produced by the yeast may form a complex with cyclodextrin and shift the equilibrium in favor of cyclodextrin production. The yeast with immobilized CGTase produced 24.07 mg/ml cyclodextrins when it was incubated in yeast medium supplemented with 4% starch. The production of CDs by CGTase is an important industrial process, and it has been reviewed by many authors (2,12,26,28). The CD production process is normally divided into two processes. The solvent process that is commonly used requires an organic complexing reagent to precipitate a specific CD selectively and to obtain one main product, while the nonsolvent process does not require a complexing reagent and results in a mixture of CDs. The addition of debranching enzymes (e.g., pullulanases and isoamylases) before the actual enzymatic CD production process can increase the yield by 4 to 6% (4,7,27). CDs are also produced by immobilized CGTase, which enables reuse of the enzyme (30). However, efficient CD production using whole-cell biotransformation has not been achieved so far. The composition of the CD products obtained by a CGTase synthesis reaction is determined primarily by the type of the enzyme employed and can be manipulated by addition of complexing agents or organic solvents to the reaction mixture (3, 27).CGTases catalyze transglycosylation reactions, which include cyclization, coupling, and disproportionation reactions, as well as a hydrolysis reaction (10,11,18,31,34). The disproportionation and hydrolytic reactions produce glucose and maltose besides the oligosaccharides. Glucose and maltose are efficient acceptors of the CGTase coupling reaction, and they react with CDs to form linear oligosaccharides and thus affect the formation of CDs. Lima et al. (20) proposed a CD production process in which the CGTase synthesis reaction is combined with yeast fermentation. The yeast consumes the glucose and maltose, which are produced during CD production by CGTase, while the ethanol produced by the yeast increases the yield of CDs by forming inclusion complexes with CDs, which are inhibitors of CGTase (19). CGTases have also been employed to produce high yields of large-ring CDs by adjusting the reaction conditions to prevent conversion of these CDs to small CDs (25,32).In this study, we set up a novel...