Micro-organisms have often been considered for the production of oils and fats as an alternative to agricultural commodities. However, with the continuing low cost of agricultural production of oil-seeds, biotechnology has little to offer in the way ofcompetition against such items as soybean oil, groundnut oil, and even polyunsaturated oils such as sunflower oil even though good facsimiles of these oils could be produced. It is now clear that if we are to use microorganisms to produce lipids, i.e. Single Cell Oil, then these must be highly specific ones which are currently expensive to obtain from agricultural sources. In particular, the possible production of a cocoa-butter substitute using mutated yeast cells is reviewed here as well as the production of highly polyunsaturated fatty acids (PUFAs) using various species of mould. With regard to producing a cocoa-butter equivalent fat, it is necessary to identify not only a cheap carbon source on which the yeast may grow (this is now considered likely to be lactose arising from whey) as well as deriving a mutant strain of the yeast which will accumulate large amounts of stearic acid within the oil. The recent work carried out in The Netherlands and New Zedland to achieve these goals is described. With regard to polyunsaturated fatty acid production, various prospects exist and indeed. the commercial production of one acid, gamma-linolenic acid, is now being produced commercially in both the U.K. and Japan. The background work leading to this product is described and opportunities for other PUFAs being produced biotechnologically are d 1 scussed .