The major bottlenecks in rearing the highly priced gastropod abalone (Haliotis spp.) are the slow growth rate and the high mortality during the first 8 to 12 weeks following metamorphosis and settling. The most likely reason flor these problems is related to nutritional deficiencies in the diatom diet on which the post larvae (PL) feed almost exclusively in captivity. Higher survival and improved growth rate will reduce the considerable expense of hatchery-nursery resisdence time and thereflore the production costs. BARD supported our research for one year only and the support was given to us in order to prove that "(1) Abalone PL feed on encapsulated diatoms, and (2) heterotrophic diatoms can be mass produced." In the course of this year we have developed a novel nutrient delivery system specifically designed to enhance growth and survival of post-larval abalone. This approach is based on the sodium-alginate encapsulation of heterotrophically grown diatoms or diatom extracts, including appetite-stimulating factors. Diatom species that attract the PL and promote the highest growth and survival have been identified. These were also tested by incorporating them (either intact cells or as cell extracts) into a sodium-alginate matrix while comparing the growth to that achieved when using diatoms (singel sp. or as a mixture). A number of potential chemoattractants to act as appetite-stimulating factors for abalone PL have been tested. Preliminary results show that the incorporation of the amino acid methionine at a level of 10-3M to the sodim alginate matrix leads to a marked enhancement of growth. The results ol these studies provided basic knowledge on the growth of abalone and showed that it is possible to obtain, on a regular basis, survival rates exceeding 10% for this stage. Prior to this study the survival rates ranged between 2-4%, less than half of the values achieved today. Several diatom species originated from the National Center for Mariculture (Nitzchia laevis, Navicula lenzi, Amphora T3, and Navicula tennerima) and Cylindrotheca fusiformis (2083, 2084, 2085, 2086 and 2087 UTEX strains, Austin TX) were tested for heterotrophic growth. Axenic colonies were initially obtained and following intensive selection cycles and mutagenesis treatments, Amphora T3, Navicula tennerima and Cylindrotheca fusiformis (2083 UTEX strain) were capable of growing under heterotrophic conditions and to sustain highly enriched mediums. A highly efficient selection procedure as well as cost effective matrix of media components were developed and optimized. Glucose was identified as the best carbon source for all diatom strains. Doubling times ranging from 20-40 h were observed, and stable heterotroph cultures at a densities range of 103-104 were achieved. Although current growth rates are not yet sufficient for full economical fermentation, we estimate that further selections and mutagenesis treatments cycles should result in much faster growing colonies suitable for a fermentor scale-up. As rightfully pointed out by one of the reviewers, "There would be no point in assessing the optimum levels of dietary inclusions into micro-capsules, if the post-larvae cannot be induced to consume those capsules in the first place." We believe that the results of the first year of research provide a foundationfor the continuation of this research following the objectives put forth in the original proposal. Future work should concentrate on the optimization of incorporation of intact cells and cell extracts of the developed heterotrophic strains in the alginate matrix, as well as improving this delivery system by including liposomes and chemoattractants to ensure food consumption and enhanced growth.