In Euglena cells under anaerobic conditions, paramylon, the storage polysaccharide, is promptly degraded and converted to wax esters. The wax esters synthesized are composed of saturated fatty acids and alcohols with chain lengths of 10-18, and the major constituents are myristic acid and myristyl alcohol. Since the anaerobic cells gain ATP through the conversion of paramylon to wax esters, the phenomenon is named "wax ester fermentation". The wax ester fermentation is quite unique in that the end products, i.e. wax esters, have relatively high molecular weights, are insoluble in water, and accumulate in the cells, in contrast to the common fermentation end products such as lactic acid and ethanol.A unique metabolic pathway involved in the wax ester fermentation is the mitochondrial fatty acid synthetic system. In this system, fatty acid are synthesized by the reversal of β-oxidation with an exception that trans-2-enoyl-CoA reductase functions instead of acyl-CoA dehydrogenase. Therefore, acetyl-CoA is directly used as a C donor in this fatty acid synthesis, and the conversion of acetyl-CoA to malonyl-CoA, which requires ATP, is not necessary. Consequently, the mitochondrial fatty acid synthetic system makes possible the net gain of ATP through the synthesis of wax esters from paramylon. In addition, acetyl-CoA is provided in the anaerobic cells from pyruvate by the action of a unique enzyme, oxygen sensitive pyruvate:NADP oxidoreductase, instead of the common pyruvate dehydrogenase multienzyme complex.Wax esters produced by anaerobic Euglena are promising biofuels because myristic acid (C) in contrast to other algal produced fatty acids, such as palmitic acid (C) and stearic acid (C), has a low freezing point making it suitable as a drop-in jet fuel. To improve wax ester production, the molecular mechanisms by which wax ester fermentation is regulated in response to aerobic and anaerobic conditions have been gradually elucidated by identifying individual genes related to the wax ester fermentation metabolic pathway and by comprehensive gene/protein expression analysis. In addition, expression of the cyanobacterial Calvin cycle fructose-1,6-bisphosphatase/sedohepturose-1,7-bisphosphatase, in Euglena provided photosynthesis resulting in increased paramylon accumulation enhancing wax ester production. This chapter will discuss the biochemistry of the wax ester fermentation, recent advances in our understanding of the regulation of the wax ester fermentation and genetic engineering approaches to increase production of wax esters for biofuels.