Methylotrophic yeast metabolism differs from bacteria primarily on the basis of the enzymes used and the carbon assimilation pathway. Unlike bacteria which use bacterial MDH, methylotrophic yeasts oxidize methanol in their peroxisomes with a non-specific alcohol oxidase. This produces formaldehyde as well as hydrogen peroxide. Compartmentalization of this reaction in peroxisomes likely sequesters the hydrogen peroxide produced. Catalase is produced in the peroxisomes to deal with this harmful by-product.