Glycerol is formed as a by-product in production of ethanol and baker's yeast during fermentation of Saccharomyces cerevisiae under anaerobic and aerobic growth conditions, respectively. One physiological role of glycerol formation by yeast is to reoxidize NADH, formed in synthesis of biomass and secondary fermentation products, to NAD(+). The objective of this study was to evaluate whether introduction of a new pathway for reoxidation of NADH, in a yeast strain where glycerol synthesis had been impaired, would result in elimination of glycerol production and lead to increased yields of ethanol and biomass under anaerobic and aerobic growth conditions, respectively. This was done by deletion of GPD1 and GPD2, encoding two isoenzymes of glycerol 3-phosphate dehydrogenase, and expression of a cytoplasmic transhydrogenase from Azotobacter vinelandii, encoded by cth. In anaerobic batch fermentations of strain TN5 (gpd2-Delta1), formation of glycerol was significantly impaired, which resulted in reduction of the maximum specific growth rate from 0.41/h in the wild-type to 0.08/h. Deletion of GPD2 also resulted in a reduced biomass yield, but did not affect formation of the remaining products. The modest effect of the GPD1 deletion under anaerobic conditions on the maximum specific growth rate and product yields clearly showed that Gdh2p is the important factor in glycerol formation during anaerobic growth. Strain TN6 (gpd1-Delta1 gpd2-Delta1) was unable to grow under anaerobic conditions due to the inability of the strain to reoxidize NADH to NAD(+) by synthesis of glycerol. Also, strain TN23 (gpd1-Delta1 gpd2-Delta1 YEp24-PGKp-cth-PGKt) was unable to grow anaerobically, leading to the conclusion that the NAD(+) pool became limiting in biomass synthesis before the nucleotide levels favoured a transhydrogenase reaction that could convert NADH and NADP(+) to NADPH and NAD(+). Deletion of either GPD1 or GPD2 in the wild-type resulted in a dramatic reduction of the glycerol yields in the aerobic batch cultivations of strains TN4 (gpd1-Delta1) and TN5 (gpd2-Delta1) without serious effects on the maximum specific growth rates or the biomass yields. Deletion of both GPD1 and GPD2 in strain TN6 (gpd1-Delta1 gpd2-Delta1) resulted in a dramatic reduction in the maximum specific growth rate and in biomass formation. Expression of the cytoplasmic transhydrogenase in the double mutant, resulting in TN23, gave a further decrease in micromax from 0.17/h in strain TN6 to 0.09/h in strain TN23, since the transhydrogenase reaction was in the direction from NADPH and NADP(+) to NADH and NADP(+). Thus, it was not possible to introduce an alternative pathway for reoxidation of NADH in the cytoplasm by expression of the transhydrogenase from A. vinelandii in a S. cerevisiae strain with a double deletion in GPD1 and GPD2.