The use of immobilized whole cells to conduct biochemical conversions has increased significantly in the last several years. One of the most important areas is the effects of immobilization on the intrinsic metabolism of the cells employed. Little has been reported, particularly with respect to E. coli, on how immobilization affects carbon flow, energy production, and product formation. Preliminary results have shown that significant changes in metabolism occur upon immobilization. E. coli cells grown in alginate synthesize significantly more beta-galactosidase per cell, and elevated quantities of the normal metabolic byproducts acetate, pyruvate, and lactate, compared to free cells. These results support the hypothesis that immobilization changes the relative rates of carbon consumption and growth. The specific objectives of this work are to test the following two hypotheses: i) that the excess carbon consumed by immobilized cells is diverted to the synthesis of acid byproducts or of inducible protein; and ii) that mass transfer limitations on the removal of acid byproducts cause the observed changes in metabolism. The ultimate goal is to exploit immobilization-induced metabolic changes for the overproduction of recombinant proteins.