We have previously cloned the Vitreoscilla hemoglobin gene (VHb) and expressed the protein in Escherichia coli in its active form. Under oxygen-limited conditions the presence of VHb improves protein synthesis as indicated by both total protein content and the activity of an enzyme expressed from a cloned gene present on a multicopy plasmid. Measurements of nitrogen utilization rates corroborate the observation of enhanced protein synthesis; however, the rates of carbon consumption and acid synthesis remain unchanged. This suggests that the net effect of VHb in E. coli is to improve the efficiency, rather than the kinetics, of oxygen-limited aerobic metabolism. We propose two possible models for the mechanism of action of VHb: the facilitated diffusion hypothesis and the intracellular redox effector hypothesis. These suggest other systems in which cloned VHb may enhance bioprocess productivity.