Two haploid strains of Saccharomyces cerevisiae viz. MATalpha and MATa were grown in glucose and trehalose medium and growth patterns were compared. Both strains show similar growth, except for an extended lag phase in trehalose grown cells. In both trehalose grown strains increase in activities of both extracellular trehalase activities and simultaneous decrease in extracellular trehalose level was seen. This coincided with a sharp increase in extracellular glucose level and beginning of log phase of growth. Alcohol production was also observed. Secreted trehalase activity was detected, in addition to periplasmic activity. It appeared that extracellular trehalose was hydrolyzed into glucose by extracellular trehalase activity. This glucose was utilized by the cells for growth. The alcohol formation was due to the fermentation of glucose. Addition of extracellular trehalase caused reduction in the lag phase when grown in trehalose medium, supporting our hypothesis of extracellular utilization of trehalose.