Abstract: Methylotrophic microorganisms, particularly methylotrophic yeasts and more particularly Pichia pastoris, which exhibit the ability to oxidize methane to methanol. Methods of making such microorganisms and DNA constructs for making such microorganisms. Such methylotrophic microorganisms are genetically transformed to exhibit the oxidizing activity of a soluble methane monooxygenase of a methanotrophic bacterium. Such transformed methylotrophic microorganisms contain at least three methane monooxygenase hydroxylase (MMOH) protein subunits of a methanotrophic bacterium: MMOH alpha, MMOH beta and MMOH gamma and a methane monooxygenase reductase (MMOR) of a methanotrophic bacterium.