Improved productivity and costs reduction in fermentation processes may be attained by using flocculating cell cultures. The production of extracellular heterologous beta-galactosidase by recombinant flocculating Saccharomyces cerevisiae cells, expressing the lacA gene (coding for beta-galactosidase) of Aspergillus niger under the ADHI promotor and terminator in a bioreactor was studied. The effects of lactose concentration and yeast extract concentration on beta-galactosidase production in a semi-synthetic medium were analysed. The extracellular beta-galactosidase activity increased linearly with increasing initial lactose concentrations (5-150 g dm(-3)). beta-Galactosidase production also increased with increased yeast extract concentration. During the entire fermentation, no accumulation of the hydrolysed sugars, glucose and galactose, was observed. The catabolic repression of the recombinant strain when cultured in a medium containing equal amounts of glucose and galactose was confirmed. In complete anaerobiosis, the fermentation of lactose resulted in a very slow fermentation pattern with lower levels of beta-galactosidase activity. The bioreactor operation together with optimisation of culture conditions (lactose and yeast extract concentration) led to a 21-fold increase in the extracellular beta-galactosidase activity produced when compared with preliminary Erlenmeyer fermentations. (C) 2004 Society of Chemical Industry.