Due to dwindling of fossil fuel, microbial production of bio-fuel from orga
nic byproducts has acquired significance in recent years. Ethanol has been
trusted as an alternate fuel for the future. Even though several microorgan
isms, including Clostridium sp., have been as ethanologenic microbes, the y
east Saccharomyces cerevisiae and facultative bacterium Zymomonas mobilis a
re better candidates for indus trial alcohol production. Z. mobilis possess
es advantages over S. cerevisiae with respect to ethanol productivity and t
olerance, thus encouraging researchers for exploiting Z. mobilis ability to
utilize sucrose, glucose, and fructose by Entner-Deudoroff pathway, bottle
necks in Z. mobilis are: (i) its inability to convert complex carbohydrate
polymers like cellulose, hemicellulose, and starch to ethanol, (ii) its res
ulting in byproducts such as sorbitol, acetoin, glycerol, and acetic acid,
and (iii) formation of extracellular levan polymer. To circumvent these pro
blems, genetic manipulation of Z. mobilis has been attempted for broadening
the utilizable range of Z. mobilis, i.e. genes encoding several hydrolytic
enzymes from related bacterial species have been cloned, and transferred i
nto Z. mobilis. Interestingly, a pet operon (production of ethanol) was con
structed by combining pde (pyruvate decarboxylase) and adhII (alcohol dehyd
rostrains genase) genes of Z. mobilis, and transferred to other bacterial s
trains to make them ethanologenic novel strains. Through classical mutation
and selection approaches, mutants of Z. mobilis with improved fermentation
characteristics and without byproduct formation have been obtained. In add
ition to ethanol, Z. mobilis has also been metabolically engineered to prod
uce L-alanine and L-lactic acid. Genes encoding beta-carotene synthesis hav
e also been cloned and successfully expressed in Z. mobilis to enrich the f
ermented nutrients of farm animals. Several applications of levan in food a
nd pharmaceutical industries provide an opportunity to exploit Z. mobilis f
or large scale production of levan. The merits of Z. mobilis suggest the po
tential use of this organism in industrial production of various fermentati
on products.