A metabolic engineering approach was exploited to improve growth and protein secretion in the non-conventional yeast, Schwanniomyces occidentalis. Vitreoscilla hemoglobin (VHb) gene was expressed in S. occidentalis under the control of the native alpha-amylase (AMY1) promoter. Expression of VHb was confirmed by reverse transcriptase polymerase chain reaction and Western blot hybridization analysis. Effect of VHb on growth and protein secretion was studied in synthetic medium under both limiting and non-limiting dissolved oxygen conditions. Under both conditions, VHb-expressing cells exhibited higher oxygen uptake and higher specific growth rates. Levels of extracellular alpha-amylase were also elevated in the VHb-transformed strain relative to the control strain. In amylase production medium, VHb-expressing cells showed 3-fold elevated levels of alpha-amylase and a 31% increase in the total secreted protein under oxygen-limiting environment. VHb was found to localize in the mitochondria in addition to its cytoplasmic location. Inhibition of respiration by antimycin A resulted in the loss of the growth-enhancing effects of VHb. A 2.5-fold increase in the cytochrome c oxidase (COX) activity was observed in VHb-expressing cells relative to the control. In addition to this, exogenously added VHb in the assay mixture augmented COX activity.