Chemostat cultures of a catalase-negative mutant of Hansenula polymorpha CBS 4732 were able to decompose hydrogen peroxide at a high rate. This was apparent from experiments in which the yeast was grown under carbon limitation in chemostat culture on mixtures of glucose and H2O2. The enzyme responsible for H2O2 degradation is probably the mitochondrial enzyme cytochrome c peroxidase (CCP), which was present at very high activities. This enzyme was partially purified and shown to be specific for reduced cytochrome c as an electron donor; no reaction was observed with NAD(P)H. Thus, reducing equivalents for H2O2 degradation by CCP must be provided by the respiratory chain. That H2O2 can act as an electron acceptor for reducing equivalents could be confirmed with experiments in which cells were incubated with ethanol and H2O2 in the absence of oxygen. This resulted in oxidation of ethanol to equimolar amounts of acetate. Energetic aspects of mitochondrial H2O2 decomposition via CCP and the physiological function of CCP in yeasts are discussed.