The morphology of Mucor racemosus in cultures continuously sparged with nitrogen gas was investigated. When appropriate precautions were taken to prevent oxygen from entering the cultures, the morphology of the cells was uniformly yeastlike irrespective of the N2 flow rate. When small amounts of oxygen entered the cultures the resulting microaerobic conditions evoked mycelial development. Polypeptides synthesized by aerobic mycelia, microaerobic mycelia, anaerobic yeasts, and yeasts grown in a CO2 atmosphere were compared by two-dimensional gel electrophoresis. The results indicated that a large number of differences in polypeptide expression exist when microaerobic mycelia or anaerobic yeasts are compared with aerobic mycelia and that these alterations correlate with a change from an oxidative to a fermentative metabolic mode. Relatively few differences in polypeptide composition exist when microaerobic cells are compared with anaerobic cells, but these changes correlate with a change from the mycelial to the yeast morphology. We hypothesize that oxygen regulates the expression of polypeptides involved in both the metabolic mode and in morphogenesis.