A mutant of the methylotrophic yeast Hansenula polymorpha M29, which had lost the ability to grow on methanol, was characterized by a significant (up to 200-fold) decrease in the activity of a peroxisomal FAD-dependent enzyme, alcohol oxidase (AO), when the cells are incubated in a medium with methanol. Under these conditions the amount of alcohol oxidase protein in the mutant cells is decreased by a factor of only 8-10. A purified alcohol oxidase preparation isolated from the mutant cells was characterized by a 12-fold decrease in the FAD content. It was shown that the levels of free forms of FAD, as well as its precursors, riboflavin and FMN, in the wildtype and mutant strains do not differ both in the case of growth on glucose and in incubation in a medium with methanol. Nor is there any change in the bound FAD level in the yeast cells cultured in a medium with glucose. However, when the cells are incubated in a medium with methanol, the content of the bound form of FAD is decreased by an order of magnitude in the mutant. No changes in the activity of another FAD-containing peroxisomal enzyme, D-amino acid oxidase, were detected in the mutant when the yeasts were grown in a medium with glucose and D-alanine as the nitrogen source. It is suggested that damages to the alcohol oxidase structural gene arise as a result of mutagenesis.