The yeast Saccharomyces cerevisiae can synthesize, process and secrete higher eukaryotic proteins. We have investigated the expression of immunoglobulin chains in yeast and demonstrate here the synthesis, processing and secretion of light and heavy chains, the glycosylation of heavy chain, the intracellular localization of these foreign proteins by immunofluorescence, and the detection of functional antibodies in cells co-expressing both chains. This may provide the basis of a microbial fermentation process for the production of monoclonal antibodies. The co-expression of light and heavy chains in Escherichia coli has been reported but functional antibodies were not assembled in vivo. Furthermore, only low-level assembly of these chains was found in vitro.