Silicone oils were microencapsulated within polyamide (nylon) membranes cross-linked with polyethylenimine for use as an oxygen carrier in aerobic fermentation. The use of 20% microcapsule dispersions enabled a four- to five-fold increase in volumetric oxygen transfer coefficient (k(L)a), with or without the presence of cells. The improvement in oxygen transfer rates was due to the greatly increased specific surface area of the carrier in comparison to conventional bubble aeration. The production rate of dihydroxyacetone (DHA) from glycerol with Gluconobacter oxydans was increased from 1.5 to 9 mmol dm(-3) DHA h(-1) with the introduction of 20% of microcapsules in a batch fermentation and from 6 to 8 mmol dm(-3) DHA h(-1) in a fluidized bed fermentation. It is expected that the oxygen-permeable polymeric membrane coating the silicone oils should reduce the toxic or inhibitory effects previously observed with other oil-based oxygen carriers, and will eliminate the need for toxic chemical dispersants in the medium. Also, microencapsulated oxygen carriers avoid the need for vigorous agitation to maintain a dispersion of the oxygen carrier.