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Formaldehyde production was investigated with cells of a mutant, AOU-l, of a methanol yeast, Candida boidinii S2 grown in methanol-limited chemostat culture. The highest productivity was shown with cells from the culture at a dilution rate of 0.075 hr^<-1>, when cells had the highest activity of alcohol oxidase and almost minimum activity of formaldehyde dehydrogenase. Under optimal reaction conditions, 950mM formaldehyde was produced in 10-hr reaction with the cells. By the chemostat culture, not only formaldehyde productivity but also cell productivity was improved in comparison with batch culture. A maximum cell productivity of 0.2g・liter^<-1>・hr^<-1> and a cell yield of 47% were obtained.