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The main objective of this EU sponsored research project (QLK1-CT-2000-01376) is to improve the health benefit of (fermented) food products. This will be accomplished by increasing the level of food components that have a positive effect on the human health and by conversion of undesirable compounds. More information of the project and consortium lead by NIZO food research can be found at the internet on www.nutracells.com. The main goal of our contribution to in the project is to develop methods for the reproducible and cost-effective production of specific poly- and oligosaccharides in Lactococcus lactis (Fig.). The polysaccharides produced by these bacteria can be considered as 'food-grade' additives and have received considerable attention based on their relevance for dairy-product properties like texture and mouthfeel. However, and more important with respect to their properties as nutraceuticals, they appear to be active as bifidogenic prebiotic, cholesterol lowering nutraceutical and immunomodulant. The selective stimulation of the growth of Bifidobacterium, leading to significant modification of the composition of the colic microbiota, has clearly been demonstrated in human volunteers. Moreover, their non-digestible nature and stool-bulking effect also groups these compounds among the dietary fibres and thereby generating an additional claim as nutraceutical. Therefore, specific oligo- and poly-saccharides produced by lactococcal strains could have a wide range of applications in the pharmaceutical and food industry. At present this type of carbohydrates are either synthesised chemically or by in vitro enzymatic sugar polymerisation, or directly isolated from (usually pathogenic) micro-organisms, all of which are inefficient and therefore costly procedures.