There is a strict aerobic bacterium, Vitreoscilla stercoraria, living in stagnant ponds and decaying vegetable matter that produces a hemoglobin (VHb) to sustain these oxygen-limiting conditions. The gene coding for this protein has been cloned and expressed in a variety of prokaryotic organisms, but also transferred in a few eukaryotic hosts leading to improved growth, increased production of recombinant proteins and enhanced yields of secondary metabolites. To further investigate these properties a randomly mutated expression library in E. coli based on the Vitreoscilla hemoglobin gene, vhb, was created by error-prone PCR. Several mutants with altered phenotype were obtained. Four mutants were able to reach 22–155% higher final cell densities in microaerobic fed-batch cultivations than an E. coli clone expressing native VHb. The expression levels of mutated VHb proteins were similar to the amounts produced by the controls expressing native VHb. The clones also synthesized functional VHb, as their CO-binding absorbance spectra indicated absorption characteristics analogous to native VHb having an absorption maximum at 419 nm and a minimum at 437 nm. This indicates that the amino acid mutations within the vhb gene are able to slightly change the structure of VHb. However, the change of structure of mutant VHbs was able to improve the growth of E. coli under microaerobic conditions. By-product formation of these mutants was also decreased, for acetate to approximately 18–40% and for ethanol up to 60% of final concentration in cultures expressing native VHb. These findings indicate that there is a correlation between a decreased by-product formation and an improved respiratory efficiency in the E. coli cell caused by mutations within the vhb gene. Furthermore, the production of a recombinant marker protein β-lactamase was increased up to five times for mutants compared to the strain producing native VHb. These results show that an E. coli cell expressing mutant VHb is able to direct more carbon towards cell growth and recombinant protein production relative to a control cell. Our intention is now to study the effects of the most interesting mutant VHbs in higher eukaryotes.