We have studied methanol-utilization in a peroxisome-deficient (PER) mutant of Hansenula polymorpha. In spite of the fact that in carbon-limited chemostat cultures under induced conditions the enzymes involved in methanol metabolism were present at wild-type (WT) levels, this mutant is unable to grow on methanol as a sole carbon and energy source. Addition of methanol to glucose-limited (SR = 12.5 mM) chemostat cultures of the PER mutant only resulted in an increase in yield when small amounts were used (up to 22.5 mM). At increasing amounts however, a gradual decrease in cell density was observed which, at 80 mM methanol in the feed, had dropped below the original value of the glucose-limited culture. This reduction in yield was not observed when increasing amounts of formate instead of methanol were used as supplements for the glucose-limited mutant culture and also not in WT cells, used as control in these experiments. The effect of addition of methanol to a glucose-limited PER culture was also studied in the transient state during adaptation of the cells to methanol. The enzyme patterns obtained suggested that the ultimate decrease in yield observed at enhanced methanol concentrations was due to an inefficient methanol-metabolism as a consequence of the absence of peroxisomes. The absence of intact peroxisomes results in two major problems namely i) in H2O2-metabolism, which most probably is no longer mediated by catalase and ii) the inability of the cell to control the fluxes of formaldehyde, generated from methanol. The energetic consequences of this metabolism, compared to the WT situation with intact peroxisomes, are discussed.