Production of the recombinant enzyme p - (1,3)(1,4) - glucanase in Saccharomyces cerevisiae (DBY746), containing the plasmid pJG317 was studied for both free cells and cells immobilised in calcium alginate During prolonged growth, glucanase production decreased exponentially in the case of free cells No decrease in enzyme production was observed for immobilised cells. Plasmid stability of both free and immobilised cells was studied The percentage of plasmid-containing cells in suspension culture decreased to 24% in 96 hours. The plasmid stability of cells throughout the immobilisation matrix was measured. It was found that cells in the centre of the gel beads retained the recombinant plasmid to a greater degree than free cells, or cells at the surface of the matrix. Continuous stable production of p~glucanase by free cells in non-selective medium was not possible. Enzyme production by the immobilised yeast strain, however, was stable for 10 days, with no sign of decrease. The enzyme productivity for immobilised cells in a continuous reactor (using non-selective medium), was 48 U/ml/h, compared to 3 6 U/ml/h for free cells in batch culture using nonselective medium.