A novel two-step fermentation process using a mixed-sugar medium mimicking microalgal hydrolysate has been proposed to avoid glucose repression and thus to maximize substrate utilization efficiency. When DagA, a beta-agarase was produced in one step in the mixed-sugar medium by using a recombinant Streptomyces lividans, glucose was found to have negative effects on the consumption of the other sugars and DagA biosynthesis causing low substrate utilization efficiency and low DagA productivity. To overcome such difficulties, a new strategy of sequential substrate utilization was developed. In the first step, glucose was consumed by Saccharomyces cerevisiae together with galactose and mannose producing ethanol, after which DagA was produced from the remaining sugars of xylose, rhamnose and ribose. Fucose was not consumed. By adopting this two-step process, the overall substrate utilization efficiency was increased approximately 3-fold with a nearly 2-fold improvement of DagA production, let alone the additional benefit of ethanol production. (C) 2015 Elsevier Ltd. All rights reserved.