A simple and rapid procedure to make yeast cells permeable by agitating with toluene–ethanol, (TE) 1:4, v/v was developed. The permeated cells retained their ability to catalyze certain enzyme reactions. Temperature and duration of agitation during TE treatment played an important role in retention of the catalytic potential of permeated cells. Thein situassay using permeated cell preparations was more sensitive even in the absence of added cofactors than the in vitro assay in detecting assimilatory nitrate reductase (NAD(P)H:nitrate oxidoreductase, EC 1.6.6.2) (NAR) activity inCandida utilis.Usingin situassay technique, different mechanisms regulating the biosynthesis of NAR inC.utiliswere investigated. Nitrogen starvation did not lead to derepression of NAR. NO3−ions were absolutely essential for induction and maintenance of high levels of NAR activity. Cells grown on ammonium nitrate possessed relatively lower levels of NAR. Kinetics of NAR induction were followed as a function of time and inducer concentration. The influence of various cations on the induction of NAR by nitrate was investigated. A wide range ofD-amino acids induced NAR synthesis. Of 22L-amino acids tested only phenylalanine induced significant levels of NAR. Various intermediates of the pathway of nitrate reduction influenced the rate of NAR induction. There was a rapid disappearance of in vivo activity of the enzyme of induced yeast cells on nitrogen starvation, and the rate of loss was accelerated by the presence of NH4+.