The importance and development of industrial biotechnology processing has led to the utilisation of microbial enzymes in various applications. One of the important enzymes is amylase, which hydrolyses starch to glucose. In Malaysia, the use of sago starch has been increasing, and it is presently being used for the production of glucose. Sago starch represents an alternative cheap carbon source for fermentation processes that is attractive out of both economic and geographical considerations. Production of fermentable sugars from the hydrolysis of starches is normally carried out by an enzymatic processes that involves two reaction steps, liquefaction and saccharification, each of which has different temperature and pH optima with respect to the maximum reaction rate. This method of starch hydrolysis requires the use of an expensive temperature control system and a complex mixing device. Our laboratory has investigated the possibility of using amylolytic enzyme-producing microorganisms in the continuous single-step biological hydrolysis of sago flour for the production of a generic fermentation medium. The ability of a novel DNA-recombinated yeast, Saccharomyces cerevisiae strain YKU 107 (expressing alpha-amylase production) to hydrolyse gelatinised sago starch production has been studied with the aim of further utilizing sago starch to obtain value-added products.