Mucor circinelloides is being investigated as a possible host for the production of heterologous proteins. Thus, the environmental conditions defining the physiology and morphology of this dimorphic fungus have been investigated in submerged batch cultivation. The optimal conditions for growth of each form have been defined. Pure cultures of the multi-polar budding yeast form could be obtained under anaerobic conditions (with 70% N-2/30% CO2 or 100% N-2 as the sparge gas and without aeration). The highest maximum specific growth rate (0.30 h(-1)) was obtained in anaerobic cultivation; the yield of biomass on glucose (Y-SX) was 0.12 (c-mole basis). A high maximum specific growth rate was obtained when the organism grew as the filamentous form under aerobic conditions (0.25 h(-1)), with a Y-SX of 0.24 (c-mole basis). The maximum specific growth rates achieved are comparable to most industrial filamentous fungi under similar growth conditions. High levels of ethanol were observed with all growth conditions. The overriding effector of morphological development was found to be oxygen. In batch cultures it was therefore possible to induce the dimorphic shift by controlling the influent gas atmosphere. A specific growth rate of 0.19 h(-1) was maintained during the shift from the yeast to the filamentous form.