Methylotrophic yeasts, which are able to utilize methanol as the sole carbon and energy source, have been intensively studied in terms of physiological function and practical applications. When these yeasts grow on methanol, the genes encoding enzymes and proteins involved in methanol metabolism are strongly induced. Simultaneously, peroxisomes, organelles that contain the key enzymes for methanol metabolism, massively proliferate. These characteristics have made methylotrophic yeasts efficient hosts for heterologous protein production using strong and methanol-inducible gene promoters and also model organisms for the study of peroxisome dynamics. Much attention has been paid to the interaction between methylotrophic microorganisms and plants. In this chapter, we describe how methylotrophic yeasts proliferate and survive on plant leaves, focusing on their physiological functions and lifestyle in the phyllosphere. Our current understanding of the molecular basis of methanol-inducible gene expression, including methanol-sensing and its applications, is also summarized.