Formaldehyde is a weak mutagen and recombinagen in wild type strains of Saccharomyces cerevisiae. Genotoxicity of formaldehyde is influenced by the activity of the SFA yeast gene. Yeast transformants containing multiple copies of the plasmid-contained SFA gene are hyperresistant to the chemical and grow in the presence of 5 mM formaldehyde, a concentration lethal for the wild type. The SFA-encoded protein mediates the degradation of formaldehyde and its activity is most probably responsible for the low or absent genotoxic effects in formaldehyde-treated cells. Multi-copy vectors containing the SFA gene are retained in yeast transformants growing in complex media supplemented with 5 mM formaldehyde. Cells harboring such multi-copy vectors may, therefore, be propagated in large batch cultures in undefined media in the presence of formaldehyde concentrations toxic to the wild type.