R. eutropha H16 is a model for facultative chemolithoautotrophic bacteria able to grow with organic substrates or H2/CO2 under aerobic conditions. When experiencing nutrient limitation, R. eutropha H16 directs most of the reduced carbon flux to synthesis of polyhydroxybutyrate (PHB), a biopolymeric compound stored in granules. Diverting this substantial metabolic flux may be a promising method to produce biofuels at high titers from biomass substrates (sugars, organic acids) or H2/CO2. Therefore, we deleted genes required for PHB synthesis in R. eutropha and inserted heterologous pathways to produce hydrocarbon biofuels. We constructed defined R. eutropha mutants that produced no PHB when grown with organic substrates under nutrient-limited conditions, but produced large amounts of pyruvate, which was excreted into the medium. We also constructed expression vectors containing heterologous genes for hydrocarbon production and transformed these vectors into R. eutropha wild-type and PHB- strains. Target hydrocarbons were detected by GC/MS analysis when these strains were grown under heterotrophic conditions. Current efforts are directed to increase the titer of hydrocarbon production by manipulating R. eutropha fatty acid biosynthesis and by improving heterologous protein expression. Optimized conditions are also being developed for autotrophic production of hydrocarbons by engineered R. eutropha strains.