The cyclodextrin glucanotransferase (CGTase) gene (cgt) from Bacillus circulans 251 was cloned into plasmid pYD1, which allowed regulated expression, secretion, and detection. The expression of CGTase with a-agglutinin at the N-terminal end on the extracellular surface of Saccharomyces cerevisiae was confirmed by immunofluorescence microscopy. This surface-anchored CGTase gave the yeast the ability to directly utilize starch as a sole carbon source and the ability to produce the anticipated products, cyclodextrins, as well as glucose and maltose. The resulting glucose and maltose, which are efficient acceptors in the CGTase coupling reaction, could be consumed by yeast fermentation and thus facilitated cyclodextrin production. On the other hand, ethanol produced by the yeast may form a complex with cyclodextrin and shift the equilibrium in favor of cyclodextrin production. The yeast with immobilized CGTase produced 24.07mg/ml cyclodextrins when it was incubated in yeast medium supplemented with 4% starch.