Genes coding for Vitreoscilla hemoglobin (VHb) with peroxisome targeting signal (PTS1) tag and beta-galactosidase were co-expressed in Pichia pastoris under the alcohol oxidase1 (AOX1) promoter. The expression of VHb-PTS1 had no positive effect on cell growth but significantly enhanced the whole cell beta-galactosidase activity to 4-fold higher than that of VHb-free cell in yeast extract/peptone/methanol medium under aerobic cultivation.