Lactic acid bacteria and bifidobacteria are known to produce a wide range of nutrients and biogenic compounds as products of their metabolic activity. These include vitamins, sugars, fatty acids and in addition, they can release bioactive peptides from food grade sources, exhibiting a wide range of activities from anti-microbial to anti-hypertensive properties through their proteolytic activity. The main aim of this manuscript is to outline the potential which these food grade bacteria have to act as cell factories for the production of nutrients and health promoting compounds. The fact that these bacteria in general have a relatively simple metabolism and can be genetically manipulated is opening exciting possibilities for overproduction of such substances. For example, such approaches have already resulted in the generation of lactic acid bacteria (LAB), which over-produce vitamins such as folate and non-metabolisable sugar alcohols such as mannitol and xylitol.