A cell surface engineering system of yeast Saccharomyces cerevisiae has been established and novel yeasts armed by biocatalysts (enzymes-glucoamylase, alpha-amylase, CM-cellulase, beta-glucosidase, and lipase), termed arming yeasts", were constructed. The gene encoding Rhizopas oryzae glucoamylase with its secretion signal peptide was fused with the gene encoding the C-terminal half of yeast alpha-agglutinin and expressed in S. cerevisiae. Glucoamylase was shown to be displayed on the cell surface in its active form and anchored covalently to the cell wan. S. cerevisae itself is unable to utilize starch, while the surface-engineered yeast could grow on starch as the sole carbon source. For further improvement of the ability to directly ferment starchy materials by the cell surface-engineered yeast, engineered yeasts displaying two amylolytic enzymes on the cell surface were constructed. The gene encoding R. oryzae glucoamylase with its own secretion signal peptide and a truncated fragment of the alpha-amylase gene from Bacillus stearothermophilus with the prepro secretion signal sequence of the yeast alpha-factor were fused with the gene encoding the C-terminal half of the yeast alpha-agglutinin. The surface-engineered yeast co-displaying glucoamylase and alpha-amylase by the integration of their genes into the chromosomes could grow faster on starch as the sole carbon source than the engineered cells displaying only glucoamylase. The system was further applied to the construction of a novel cellulose-utilizing yeast by displaying cellulolytic enzymes in their active form on the cell surface of S. cerevisiae, Engineered yeasts co-displaying FI-carboxymethylcellulase (CM-cellulase), one of the endo-type cellulases, and beta-glucosidase from Aspergillus aculeatus on their cell surface were also constructed. The yeasts displaying these cellulases were given the ability to assimilate cellooligosaccharide, suggesting the possibility that the assimilation of cellulosic materials may be carried out by S. cerevisiae displaying heterologous cellulase proteins on the cell surface. The system has also been used for the cell surface display of R. oryzae lipase (ROL), Linker peptides (spacers) consisting of the Gly/Ser repeat sequence were inserted at the C-terminal portion of ROL to enhance the lipase activity. The insertion of an appropriate length of a linker peptide as a spacer is effective in the display of ROL, having the active region at the C-terminal portion, on the cell surface. Thus, cell surface engineering will be capable of conferring novel additional abilities upon living cells and will herald a new era in the held of biotechnology.