Metabolic pathways are commonly organised by sequestration into discrete cellular compartments. Compartments prevent unfavourable interactions with other pathways and provide local environments conducive to the activity of encapsulated enzymes. Such compartments are also useful synthetic biology tools for examining enzyme/pathway behaviour and for metabolic engineering. Here, we expand the intracellular compartmentalisation toolbox for budding yeast (Saccharomyces cerevisiae) with engineered Murine polyomavirus virus-like particles (MPyV VLPs). The MPyV system has two components: VP1 which self-assembles into the compartment shell; and a short anchor, VP2C, which mediates cargo protein encapsulation via binding to the inner surface of the VP1 shell. Destabilised GFP fused to VP2C was specifically sorted into VLPs and thereby protected from host-mediated degradation. In order to access metabolites of native and engineered yeast metabolism, VLP-based nanocompartments were directed to assemble in the cytosol by removal of the VP1 nuclear localisation signal. To demonstrate their ability to function as a metabolic compartment, MPyV VLPs were used to encapsulate myo-inositol oxygenase (MIOX), an unstable and rate-limiting enzyme in D-glucaric acid biosynthesis. Strains with encapsulated MIOX produced ~20% more D-glucaric acid compared to controls expressing ‘free’ MIOX - despite accumulating dramatically less expressed protein - and also grew to higher cell densities. These effects were linked to enzyme stabilisation and mitigation of cellular toxicity by the engineered compartment. This is the first demonstration in yeast of an artificial biocatalytic compartment that can participate in a metabolic pathway and establishes the MPyV platform as a promising synthetic biology tool for yeast engineering.