The goal of this proposal is to develop a fermentation system to produce a variety of rare and deoxysugars using promiscuous DHAP-dependent aldolases. Carbon-carbon bond forming aldolase reactions are of great relevance to the preparation of fine chemicals, intermediates and bioactive chemicals. The aldolase enzymes responsible for this kind of C-C bond formation catalyze an asymmetric aldol condensation which consists of coupling an aldehyde and a ketone. Dihydroxyacetone phosphate (DHAP) dependent aldolases are attractive because there are four different types available with different stereo-specificities. While substrate specificity for the acceptor is flexible, they require DHAP to be the donor. Unfortunately, DHAP is very unstable and expensive, making it impractical for industrial use. We propose to develop a novel approach to produce DHAP using a metabolically modified strain of Hansenula polymorpha, a methylotrophic yeast. H. polymorpha has a unique metabolism with the ability create C6 and DHAP solely from mixed carbon sources including methanol. Mutants that that accumulate the precursor to DHAP, dihydroxyacetone at high yields have been identified and will be used to enhance DHAP production. In Phase I we will demonstrate the feasibility of using an in vivo conversion of intracellular DHAP to produce the model compound L-fuculose. This reaction is catalyzed by Fuculose-1-phosphate aldolase (FucA). Specifically, we will demonstrate the ability to produce L-fuculose using H. polymorpha cell-free extracts, engineer H. polymorpha for improved DHAP production, clone and express the fuculose-1-phosphate aldolase into H. polymorpha, and finally demonstrate the production of L-fuculose in vivo. In Phase II we will optimize the system further, knock-out genes that convert DHAP to GAP, and introduce fuculose isomerase for production of L-fucose. We will then clone the other main DHAP-dependent aldolases with broader specificity to aldehydes and demonstrate production of dozens of deoxysugars, rare sugars and carbohydrates using different aldehyde acceptors. In Phase III the technology will be commercialized by licensing DHAP and aldolase producing strains and carrying out contract R&D using the system for the generation of drug discovery candidates and the preparative of pharmaceutical intermediates.