The expts. were carried out with Saccharomyces fragilis, Torula cremoris and T. lactosa at 30[degree] C. The yeasts were cultivated on whey agar. The substrate was a sterile, clear soln. of dried whey, which contained about 7% lactose. The yeast was centrifuged, washed with H2O and made up into a 5% suspension. The course of the fermentation was followed by measuring the CO2 evolved; the hydrolysis, by detn. of the reduction according to Willstatter-Schudel. S. fragilis and T. cremoris fermented lactose most rapidly, glucose more slowly, and galactose most slowly of all. T. lactosa also fermented lactose most rapidly, but glucose more slowly than galactose. At a pH of about 6, S. fragilis fermented and hydrolyzed lactose at about equal rates, while the other 2 yeasts hydrolyzed the sugar much more rapidly than they fermented it. T. cremoris and T. lactosa readily fermented lactose in a pH range from 2.4 to 6.3, while at a pH from 2 to 4.5, fermentation but no hydrolysis took place. It is concluded that the lactase, sac-charase etc. are so localized in the yeast cell that the acidity of the external soln. prevails in their environment, and that the hydrolyzing enzymes have their active groups on the external side of the cell membrame.