In this work, multi-parameter flow cytometric techniques, coupled with dual colour fluorescent staining, have been used to study the metabolic consequences of inclusion body formation in high cell density fed-batch cultures of the recombinant E. coli strain MSD3735, producing the IPTG inducible model mammalian protein, AP50. Further, we report on the development of the scale-down, two compartment (STR + PFR) experimental simulation model to study, for the first time, the effect of a changing microenvironment with respect to three of the major spatial heterogeneities that may be associated with large-scale bio-processing (pH, glucose and dissolved oxygen concentration) on a recombinant bacterial system. Using various time points for induction and various scale-down configurations, it has been shown that inclusion body formation is followed immediately by a detrimental progressive change in individual cell physiological state with respect to both cytoplasmic membrane polarisation and permeability, resulting in a lower final biomass yield. However, the extent of this change was found to be dependent on whether the AP50 protein was induced or not, on the time of induction and on which combination of heterogeneities was being simulated. From this and previous work, it is clear that the scale-down two-compartment model can be used to study the impact of genetically modifying an organism to produced inclusion bodies and any range and combination of potential heterogeneities known to exist at the large scale.