Oxidation of methanol, formaldehyde and formic acid was studied in cells and cell-free extract of the yeast Candida boidinii No. 11Bh. Methanol oxidase, an enzyme oxidizing methanol to formaldehyde, was formed inducibly after the addition of methanol to yeast cells. The oxidation of methanol by cell-free extract was dependent on the presence of oxygen and independent of any addition of nicotine-amide nucleotides. Temperature optimum for the oxidation of methanol to formaldehyde was 35 degrees C, pH optimum was 8.5. The Km for methanol was 0.8mM. The cell-free extract exhibited a broad substrate specificity towards primary alcohols (C1--C6). The activity of methanol oxidase was not inhibited by 1mM KCN, EDTA or monoiodoacetic acid. The strongest inhibitory action was exerted by p-chloromercuribenzoate. Both the cells and the cell-free extract contained catalase which participated in the oxidation of methanol to formaldehyde; the enzyme was constitutively formed by the yeast. The pH optimum for the degradation of H2O2 was in the same range as the optimum for methanol oxidation, viz. at 8.5. Catalase was more resistant to high pH than methanol oxidase. The cell-free extract contained also GSH-dependent NAD-formaldehyde dehydrogenase with Km = 0.29mM and NAD-formate dehydrogenase with Km = 55mM.