Aldehyde production by cells of a methanol utilizing yeast, Hansenula nonfermentans KYP-1 was improved when they were grown in a methanol-limited continuous culture, in comparison with cells grown in a batch culture. A higher cell yield was also obtained in continuous culture than in batch culture. This could be due to the fact that a lower methanol concentration was maintained in the jar fermentor to minimize growth inhibition by methanol. A maximum cell productivity of 0.219 g.$liter^{-1}.hr^{-l}$ and a cell yield of 47% were obtained at dilution rates of 0.1 $hr{-1}$ and 0.06 hr{-1}, respectively. The greatest amount of aldehyde was measured at a dilution rate of 0.08 $hr{-1}$. Under optimum reaction conditions, 915.7 mM of acetaldehyde was produced from 1.5 M ethanol after 21 hours reaction, with a conversion rate of 61%. Propionaldehyde and acrolein were produced with conversion rates of 32.7% and 44%, respectively.