Polyhydroxybutyrate (PHB) offers many advantages over traditional petrochemically derived plastics. In addition to its complete biodegradability, PHB is formed from renewable resources. It possesses better physical properties than polypropylene for food packaging applications and is completely nontoxic. The poor low-impact strength of PHB is solved by incorporation of hydroxyvalerate monomers into the polymer to produce polyhydroxybutyrate-co-valerate (PHBV), which is commercially marketed under the trade name Biopol. Like PHB, PHBV completely degrades into carbon dioxide and water under aerobic conditions. Microbial synthesis of PHB is the best method for industrial production because it ensures the proper stereochemistry for biodegradation. Microorganisms synthesize and store PHB under nutrient-limited conditions and degrade and metabolize it when the limitation is removed. Current production employs Alcaligenes eutrophus because it grows efficiently on glucose as a carbon source, accumulates PHB up to 80% of its dry weight, and is able to synthesize PHBV when propionic acid is added to the feedstock. PHBV is currently 16 times the price of polypropylene. However, the development of transgenic PHA-producing organisms is expected to greatly reduce its cost. Benefits of using transgenic systems include lack of a depolymerase system, ability to use faster-growing organisms, production of highly purified polymers, and ability to utilize inexpensive carbon sources. Because transgenic plants may someday result in the evolution of plastic crops that could lower the price of PHA to a competitive level, future research will surely focus on such recombinant DNA techniques.